These five maps prove it’s time to reform council tax in England

Bristol, where homes are probably quite under taxed. Image: Matt Cardy/Getty.

As local authorities set out their budgets for the year, council tax is set to rise in many regions across England. Councils in Lancashire, Coventry, Cornwall and Surrey, among others, have agreed to hikes of up to 4 per cent.

But while council tax will be crucial to help local authorities absorb cuts from central government, there are serious doubts as to whether the levy is fit for purpose.

First introduced in 1993, council tax is imposed on properties to help pay for local services, council wages and administration. In general, how much council tax people pay depends on which “band” their property falls into. These bands are allocated by property value, ranging from A (the lowest value) to H (the highest value).


But here’s the catch: in England, council tax bands are still based on property values from 1991.

I decided to map out the differences between 1991 council tax valuations and today’s house prices, to see whether the tax is as regressive and arbitrary as some suggest.

The big housing boom

Let’s begin with some numbers. If your house was worth £50,000 in 1991, and its price had risen with inflation, it would now be worth about double that.

If this had occurred uniformly across the country, it wouldn’t be a problem – but we all know that this didn’t happen. Instead, house prices rocketed, particularly in London and the south-east. For example, in 2014 the average price in Burnley was £85,000 (up 166 per cent since 1995), while in Kensington and Chelsea it was £1.2m (up 558 per cent).

The fact that some prices have risen more than others is a major issue, because it means the amount we pay in council tax is increasingly detached from the relative value of our properties. In other words, those whose properties have risen disproportionately in value are paying less than their fair share of council tax.

House Price Growth, 1995 to 2014. Source: ONS.

Looking at average house price growth in the top and bottom 25 local authorities in England since 1995, we can see that prices have gone up across the board – but there is now a much bigger gap between the richest and poorest areas.

With a little help from colleagues at the Consumer Data Research Centre, I mapped out the differences between house prices and council tax bands. Below, I have shown the biggest council tax band for each area in the borough, alongside a small inset map showing average house prices. Both maps are coloured according to the 1991 council tax banding.

Council tax bands vs house prices, 2015 (Islington). Source: Valuation Office Agency/HM Land Registry/author provided.

Starting with the London borough of Islington, we can immediately see that the variation in council tax bands sits in stark contrast to today’s average house prices. In 1995, the first year data are available for, the average house price in Islington was £105,000. By 2014 it had reached £533,000. Most properties in Islington belong in the top band of council tax – but, according to the data, there are no areas where more houses fall under band H than any other category.

Perhaps unsurprisingly, this is also the case across much of London.

House prices by council tax band in London, 1995-2015. Source: HM Land Registry/author provided.

In more rural locations, such as West Oxfordshire, the contrast between council tax bands and current house prices is not as stark. But the variation is now very much out of line with the original 1991 valuations: some areas have gained value more quickly than others.

Council tax bands vs house prices, 2015 (West Oxfordshire). Source: Valuation Office Agency/HM Land Registry.

To take two contrasting examples from elsewhere in England, we can look at Cornwall and Liverpool. In the former, the purchase of second homes has driven up house prices, so much so that the council removed the 10 per cent discount for these properties in 2013, following a change in government regulations.

Council tax bands vs house prices, 2015 (Cornwall). Source: Valuation Office Agency/HM Land Registry.

Meanwhile in Liverpool, where around 60 per cent of properties are in the lowest value band A, the current variation in house prices is also out of line with the 1991 bands. House prices have risen much faster in some areas than others, particularly in well-connected, inner-suburban areas such as Mossley Hill and Aigburth. The effect – as noted by the New Policy Institute – is that “as time goes by, council tax becomes ever more arbitrary”.

Council tax bands vs house prices, 2015 (Liverpool). Source: Valuation Office Agency/HM Land Registry.

When you look at these maps, the absurdity of continuing to use bands set in 1991 is pretty obvious. Naturally, it raises the vexed question of what should be done.

Well, we could re-value properties and introduce new bands, like Wales did in 2005. Or, as in Scotland, we could pursue more radical change. There, ideas for reform include property revaluation, a land value tax, and even a local income tax.

Personally, I would favour some form of land value tax, as proposed by leading economists such as Dame Kate Barker and Joe Sarling. But of course this brings its own set of challenges: for instance, unfairly taxing the Islington resident who had the good fortune to buy a house there in 1991, but who lives alone and never seeks to benefit from the value of the land or property.


At the very least, a widening of the bands at the top and bottom to reflect the growing gulf between the richest and poorest areas (and the residents' ability to pay) would be a start. With detailed data on house prices, and the technology to crunch complex datasets, this should not be an insurmountable problem. The bigger issue is that, politically speaking, such reform is “dramatic and unpopular stuff”.The Conversation

Alasdair Rae is senior Lecturer in urban Studies & planning at the University of Sheffield. He tweets as @undertheraedar.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

Which nations control the materials required for renewables? Meet the new energy superpowers

Solar and wind power facilities in Bitterfeld, Germany. Image: Getty.

Imagine a world where every country has not only complied with the Paris climate agreement but has moved away from fossil fuels entirely. How would such a change affect global politics?

The 20th century was dominated by coal, oil and natural gas, but a shift to zero-emission energy generation and transport means a new set of elements will become key. Solar energy, for instance, still primarily uses silicon technology, for which the major raw material is the rock quartzite. Lithium represents the key limiting resource for most batteries – while rare earth metals, in particular “lanthanides” such as neodymium, are required for the magnets in wind turbine generators. Copper is the conductor of choice for wind power, being used in the generator windings, power cables, transformers and inverters.

In considering this future it is necessary to understand who wins and loses by a switch from carbon to silicon, copper, lithium, and rare earth metals.

The countries which dominate the production of fossil fuels will mostly be familiar:

The list of countries that would become the new “renewables superpowers” contains some familiar names, but also a few wild cards. The largest reserves of quartzite (for silicon production) are found in China, the US, and Russia – but also Brazil and Norway. The US and China are also major sources of copper, although their reserves are decreasing, which has pushed Chile, Peru, Congo and Indonesia to the fore.

Chile also has, by far, the largest reserves of lithium, ahead of China, Argentina and Australia. Factoring in lower-grade “resources” – which can’t yet be extracted – bumps Bolivia and the US onto the list. Finally, rare earth resources are greatest in China, Russia, Brazil – and Vietnam.

Of all the fossil fuel producing countries, it is the US, China, Russia and Canada that could most easily transition to green energy resources. In fact it is ironic that the US, perhaps the country most politically resistant to change, might be the least affected as far as raw materials are concerned. But it is important to note that a completely new set of countries will also find their natural resources are in high demand.

An OPEC for renewables?

The Organization of the Petroleum Exporting Countries (OPEC) is a group of 14 nations that together contain almost half the world’s oil production and most of its reserves. It is possible that a related group could be created for the major producers of renewable energy raw materials, shifting power away from the Middle East and towards central Africa and, especially, South America.

This is unlikely to happen peacefully. Control of oilfields was a driver behind many 20th-century conflicts and, going back further, European colonisation was driven by a desire for new sources of food, raw materials, minerals and – later – oil. The switch to renewable energy may cause something similar. As a new group of elements become valuable for turbines, solar panels or batteries, rich countries may ensure they have secure supplies through a new era of colonisation.

China has already started what may be termed “economic colonisation”, setting up major trade agreements to ensure raw material supply. In the past decade it has made a massive investment in African mining, while more recent agreements with countries such as Peru and Chile have spread Beijing’s economic influence in South America.

Or a new era of colonisation?

Given this background, two versions of the future can be envisaged. The first possibility is the evolution of a new OPEC-style organisation with the power to control vital resources including silicon, copper, lithium, and lanthanides. The second possibility involves 21st-century colonisation of developing countries, creating super-economies. In both futures there is the possibility that rival nations could cut off access to vital renewable energy resources, just as major oil and gas producers have done in the past.


On the positive side there is a significant difference between fossil fuels and the chemical elements needed for green energy. Oil and gas are consumable commodities. Once a natural gas power station is built, it must have a continuous supply of gas or it stops generating. Similarly, petrol-powered cars require a continued supply of crude oil to keep running.

In contrast, once a wind farm is built, electricity generation is only dependent on the wind (which won’t stop blowing any time soon) and there is no continuous need for neodymium for the magnets or copper for the generator windings. In other words solar, wind, and wave power require a one-off purchase in order to ensure long-term secure energy generation.

The shorter lifetime of cars and electronic devices means that there is an ongoing demand for lithium. Improved recycling processes would potentially overcome this continued need. Thus, once the infrastructure is in place access to coal, oil or gas can be denied, but you can’t shut off the sun or wind. It is on this basis that the US Department of Defense sees green energy as key to national security.

The ConversationA country that creates green energy infrastructure, before political and economic control shifts to a new group of “world powers”, will ensure it is less susceptible to future influence or to being held hostage by a lithium or copper giant. But late adopters will find their strategy comes at a high price. Finally, it will be important for countries with resources not to sell themselves cheaply to the first bidder in the hope of making quick money – because, as the major oil producers will find out over the next decades, nothing lasts forever.

Andrew Barron, Sêr Cymru Chair of Low Carbon Energy and Environment, Swansea University.

This article was originally published on The Conversation. Read the original article.