In the wake of the scandal surrounding Theresa May’s plan for social care reforms – which would have counted a person’s home as an asset for domiciliary care – subsequently dubbed the “dementia tax” by the media; it would seem that the Labour Party had been given the best election gift they could have ever hoped for.
However, not wanting to be outdone on bad policy decisions, Jeremy Corbyn has announced his plan to abolish council tax and replace it with a new Land Value Tax, called “garden tax” by the media.
Labour’s new tax would mean that the average English home would see their tax bill treble from an average of £1,185 to £3,837 a year which is an average increase of 224 percent. The news gets even worse for London residents who could see an increase of 2,300 percent as their tax bills reach an eye-watering £17,413 at the top end.
But if you think that this new tax will only hit the millionaires of central London, then you’re sorely mistaken. Residents of Barking and Dagenham, one of the poorest council areas in the country, could see their average tax bills increased by 500 percent, to £4,579 a figure which could see many residents who are already struggling with London’s cost of living pressed even further into poverty.
Corbyn’s “garden tax” raid is not only aimed at property, agricultural land is also included in the policy, meaning farmers would be forced to charge more for their produce, as farmers could be forced to pay £6 billion under the new tax proposals. The National Farmers Union statement on the tax stated: “It would simply increase the cost of UK food production with no benefit to shoppers”.
According to the Trussell Trust, food banks gave over 1.1 million people emergency food supplies in the past year, 436,000 of them were children. The combination of higher property taxes and increased food shopping bills could see many more families pressed into food poverty and as the cost of food rises it could even force food banks to turn people away for a lack of donated food.
However the “garden tax” could hit the elderly hardest, as the home they may have bought in the late 1950s will now be worth over 273 percent of its original value on average. This increase that far outstrips wages, combining this policy with Labour’s plan to lower the inheritance tax threshold to just £425,000 may mean that the elderly are taxed out of leaving the family home to their children and grandchildren, as many properties could become unaffordable for the average person.
There has been some opposition to the Land Value Tax (“garden tax”) as the left-wing think tank, the Institute for Public Policy Research (IPPR) stated the tax “might push some heavily mortgaged homeowners over the edge” meaning that many homes could be repossessed. Properties may even dip into negative equity due to the new tax causing a collapse in house prices, however the Labour Land Campaign says that falling house prices would be “one of the long term benefits of LVT”, seemingly oblivious to the fact that a collapsing housing market was the cause for the Great Recession of 2008.
The issue of council tax has not been touched on since they were introduced in the Local Government Finance Act 1992. All governments since 1997 have not attempted to reform council tax or introduce any alternative property taxes, possibly due to the fallout from Thatcher’s infamous “poll tax” which led to widespread non-payment and riots in Central London and is thought to have greatly contributed to her downfall as Prime Minister. There is no doubt that the Conservatives will be hoping that Corbyn’s “garden tax” will cause his downfall as Labour leader.
I have been told by many people that they’re voting for Corbyn because they believe it is the compassionate and caring thing to do, and I believe that those people really do want to live in a kinder, more just society than we currently do, as do many others including myself.
Nonetheless, in the wake of this policy proposal and the effect it would have on the lives of millions of people, I must ask you, do you believe it is compassionate to tax people into poverty, is it kind or caring to ask struggling families to go without food because this tax has pushed up food prices and starved food banks of donations?
I would argue that those things are not righteous or just, they’re not caring or kind, I believe they would make the lives of millions of people worse than they currently are. So I appeal to you; if you believe in creating a better society for us all to live in, where young people can succeed and get the education they need, where people starting a family can own a home of their own and a society in which there is dignity and security in retirement, then I ask you to reconsider the party that you will be voting for on the 8th of June.
[Tax estimates are created by taking 55% of the current property value and applying the 3% proposed tax to that figure as proposed by the Labour Land Campaign]
[property value inflation figures from the Halifax 50 year housing market study 20/01/2010]
[Average house price is taken from HM Land Registry – March 2017]