PracticePeople In PracticeMinisters attacked over council tax plan

Ministers attacked over council tax plan

The deputy prime minister's proposal that town halls be able to levy the council tax at full rate on second homes, has been criticised for not being compulsory.

At present, owners of second homes get a 50% discount on council tax rates. If the white paper makes it onto the statute book, local councils could recoup an estimated £150m in additional revenue from 200,000 country homes, currently lost to them because of tax concessions.

Despite John Prescott’s white paper being warmly received by most, the chairman of the countryside agency Ewen Cameron criticised the proposal. He accused ministers of shying away from tougher measures and said ministers should force local councils to charge full tax rates on second homes, rather than giving them discretionary powers.

This view was supported by Moria Constable, chief executive of the Rural Housing Trust, who called the move a ‘fudge’. She said many local councils would not increase the council tax rate unless directed to do so.

This call for full council taxes on country homes, forms part of the government’s white paper entitled: Our Countryside: The Future – A Fair Deal for Rural England which has the aim of ‘building sustainable rural communities in an improved countryside environment’.

The paper proposes 50% tax relief for pubs, garages and village shops which offer ‘benefits to the rural community’. These benefits include providing cash access machines and Internet kiosks. The government has placed a high priority on developing Internet connectivity and making use of new technology in rural areas. Businesses, which provide technology-efficient services, could potentially save £1,250 a year.

Other measures include the setting up of £15m community service fund to establish vital village services, an allocation £15m to for rural policing and increasing the police force, providing an extra 3,000 homes next year, increasing the subsidy on local buses to 45% as well as providing £60m for innovative transport services.

In addition £37m has been earmarked for job creation and restoring high streets. The total rural development programme will invest £1.6bn in the countryside by 2006.

Links

Summary of rural white paper

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