Ministers will not reform council tax as it will be expensive for pensioners, officials reveal

The Levelling Up Select Committee previously said that council tax was “in desperate need of reform and updating” and called on ministers to start a revaluation of properties and introduce new council tax bands”.

However, the Government rejected the committee’s recommendations, saying it had “no plans to conduct a revaluation of council tax bands”.

“A revaluation would be expensive to undertake and it would particularly risk penalising those on a lower income, including pensioners, who have seen their homes appreciate in value, and might face a substantial increase in tax without having the income to pay it,” it added.

“It may also increase council tax for households where home improvements have been made since they moved in.”

Paul Johnson, Director of the Institute for Fiscal Studies, said that the revelations were “not surprising, but so depressing”.

“[The Government] know perfectly well that council tax is out of date, regressive, inequitable, inefficient, gums up the housing market, and is anti “levelling up”,” he said, adding that there was a “total lack of courage to do anything about it.”

It comes after Rachel Reeves, the shadow chancellor, told The Yorkshire Post that Labour would not be “fiddling” around with reforming taxes such as council tax, and would instead aim to cut taxes by growing the economy.

In Labour-run Wales, the Government is currently undergoing the process of revaluation of council tax bands, acknowledging that “the system is now outdated and unfair” with some households living in lower value properties paying a relatively higher share of tax.

Despite the need for reform, the price of council tax is going up for many in England, with April set to see an increase of 5 per cent, which could add around £100 to a typical band D property.