Weekend homes are cash cows for greedy councils

November 02, 2011 3:45 PM

Why is Eric Pickles doing favours for fat local councils and class-struggling LibDems?  His announcement that local councils will be able to abolish the council tax discount for the 246,000 second homes in England makes no sense whatsoever.  The measure will raise insufficient funds to cut the council tax in any meaningful way.  LibDems will still demand a tax on so-called mansions. What is the point?  The second home tax rise is just another tax, with all its usual characteristics: unfair, excessive, to pursue political rather than rational goals, and to punish success.

Today, councils can offer second home owners up to 50% discounts on their council tax bill.  Few do; four in five opt for the statutory minimum discount of 10% instead.  If you think about it, this is grossly unfair: second home owners use very few local council services.  They use some public infrastructure, but only on the days they are in residence.  In view of their disproportionately low use of the services which pay for it, a 10% discount is in itself laughable.  Now Eric Pickles wants to do away with even this meagre concession.  Second home owners are already a cash cow for greedy local councils: now they will become even more so.

Often second home owners only use one council service: the rubbish collection.  But even then, the council collects far less rubbish from them than from full time residents.  And as we all know rubbish collections have been reduced to bi-weekly in many councils.  A friend recently calculated that with his £2,500 council tax for his second home, and bi-weekly collection of, on average, just one bag, he is effectively paying £69 for each rubbish bag he puts out.

The proposal has been portrayed as a re-distributive measure: it would allow councils to cut the council tax.  In fact, it will do nothing of the sort: the scrapping of the discount will raise virtually no money at all.  Each English council will receive something in the region of £174,000 in additional revenue.  The measure is basically aimed at keeping the LibDems quiet about a tax on so-called mansions.  Not that it will calm them down.  To the LibDems the new measure will be welcome: what is more just than punishing those who work hard and are well off as a result?  LibDems love aspiration, as it enables them to tax more.

One wonders how many voters voted Conservative in order to see re-distributive measures enacted.  Perhaps Mr. Pickles thinks he needs left wing votes – to compensate for his traditional right-wing voters who may very well decide to jump ship at the next general election after last week’s three-line whip against a referendum on Europe?

The council tax is ridiculously high in most places in England.  Many local councillors never question the size of local government.  To fund the empire building and the endless stream of vanity projects which they hope will catapult them to political B-stardom, they are on a never-ending quest for more revenue.  Another friend told me the value of his second home is one third of the value of his London home.  Yet the council tax for the second home is three times that of his London home.

The problem is not second homes.  The problem is fat local government.

 

JP Floru is Director of Programmes, Adam Smith Institute & a Councillor for the City of WestminsterWhy is Eric Pickles doing favours for fat local councils and class-struggling LibDems?  His announcement that local councils will be able to abolish the council tax discount for the 246,000 second homes in England makes no sense whatsoever.  The measure will raise insufficient funds to cut the council tax in any meaningful way.  LibDems will still demand a tax on so-called mansions. What is the point?  The second home tax rise is just another tax, with all its usual characteristics: unfair, excessive, to pursue political rather than rational goals, and to punish success.

Today, councils can offer second home owners up to 50% discounts on their council tax bill.  Few do; four in five opt for the statutory minimum discount of 10% instead.  If you think about it, this is grossly unfair: second home owners use very few local council services.  They use some public infrastructure, but only on the days they are in residence.  In view of their disproportionately low use of the services which pay for it, a 10% discount is in itself laughable.  Now Eric Pickles wants to do away with even this meagre concession.  Second home owners are already a cash cow for greedy local councils: now they will become even more so.

Often second home owners only use one council service: the rubbish collection.  But even then, the council collects far less rubbish from them than from full time residents.  And as we all know rubbish collections have been reduced to bi-weekly in many councils.  A friend recently calculated that with his £2,500 council tax for his second home, and bi-weekly collection of, on average, just one bag, he is effectively paying £69 for each rubbish bag he puts out.

The proposal has been portrayed as a re-distributive measure: it would allow councils to cut the council tax.  In fact, it will do nothing of the sort: the scrapping of the discount will raise virtually no money at all.  Each English council will receive something in the region of £174,000 in additional revenue.  The measure is basically aimed at keeping the LibDems quiet about a tax on so-called mansions.  Not that it will calm them down.  To the LibDems the new measure will be welcome: what is more just than punishing those who work hard and are well off as a result?  LibDems love aspiration, as it enables them to tax more.

One wonders how many voters voted Conservative in order to see re-distributive measures enacted.  Perhaps Mr. Pickles thinks he needs left wing votes – to compensate for his traditional right-wing voters who may very well decide to jump ship at the next general election after last week’s three-line whip against a referendum on Europe?

The council tax is ridiculously high in most places in England.  Many local councillors never question the size of local government.  To fund the empire building and the endless stream of vanity projects which they hope will catapult them to political B-stardom, they are on a never-ending quest for more revenue.  Another friend told me the value of his second home is one third of the value of his London home.  Yet the council tax for the second home is three times that of his London home.

The problem is not second homes.  The problem is fat local government.

 

JP Floru is Director of Programmes, Adam Smith Institute & a Councillor for the City of Westminster

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