The ‘political vacuum’ at the heart of leveling

The ‘political vacuum’ at the heart of leveling

The ‘political vacuum’ at the heart of leveling

Two years after he started talking about it, the prime minister’s leveling agenda still seems remarkably light.

This week, MPs from the business, energy and industrial strategy committee said that leveling up runs the risk of becoming an “all and nothing policy”. That verdict came after a lack of detail in the recent big flagship policy speech led Labor to accuse Boris Johnson of serving “empty waffles,” while a Tory MP admitted that leveling up is an ambiguous phrase. that “means whatever anyone wants. to mean”.

What is clear is that, two years after Johnson started talking about it, there is still a political vacuum at the heart of the equalization.

This might be understandable if there were a dearth of interventions the prime minister could take and execute to achieve a fairer Britain. However, there is no such shortage. Indeed, MPs on both sides of the chamber are increasingly talking about a policy that ticks all the boxes.

This week, MPs from the Housing, Communities and Local Government (HCLG) committee endorsed a revision of the municipal tax, which they rightly called “an increasingly regressive tax that penalizes those who live in the most deprived areas.” Instead of the city tax, MPs on the select committee are backing a fairer system that would benefit voters on the so-called red wall and beyond. “The government should consider options for a broader reform of municipal taxes and business rates, including the possibility of replacing them with a proportional property tax,” their report says.

MPs’ concern about city taxes is in line with research showing residents of constituencies in the North and Midlands clearly get the worst deal under the current system. By backing a proportional property tax, the committee’s 11 MPs are voicing their support for a fairer system that must be central to any credible equalization program.

Research shows that across England around 76% of households would benefit from a proportional property tax set at a flat rate of 0.48% of a property’s value. Of the 44 so-called ‘Red Wall’ posts in England that the Conservatives got from Labor in 2019, 97% of households would be better off as a result of the policy, with an average saving of £ 660 per year.

The select committee report frames the proportional property tax as a long-term option, but there is no reason why the policy could not be introduced in the near future. A simple proportional property tax, as designed by the Fairer Share campaign, would be revenue neutral, keeping the amount the government can spend on our services, while generating lower bills for millions of people. . There would also be important safeguards to help the so-called ‘asset rich, cash poor’, such as the option to defer payments at notional interest rates until the point of sale.

While opponents of a proportional property tax point to practical issues, such as annual valuations, work done by the International Property Tax Institute shows that there is no technical problem with revaluation. Today, hundreds of jurisdictions use some type of automated valuation model to aid their property tax systems.

While looking for policies to anchor the leveling agenda, the prime minister doesn’t need to look far to see why the proportional property tax would do the job better than most. This week’s HCLG committee report comes after the liberal Conservative group Bright Blue also recently endorsed a proportional annual property tax on the current value of homes. Conservative MP Kevin Holinrake said: “Introducing a proportional property tax in the UK would be an excellent way for our party to demonstrate our commitment to leveling up and doing something meaningful for the many new districts we have won across the country”.

If leveling up is not an all-and-nothing policy and is indeed a serious policy program, the prime minister could prove it tomorrow by putting the proportional property tax high on the agenda. By doing so, you would be implementing a policy that would not cost the Treasury and has been shown to bring real-world leveling benefits to households across the country. As Johnson himself would say, he would be promoting a plan that is “ready for the oven.”