Plaid Cymru pledges reform of ‘regressive and distortionary’ council tax

Plaid Cymru Leader Adam Price MS has committed to reform council tax In Wales if the party wins May’s Senedd election, and has urged the Welsh Government to use unspent funds to immediately freeze the tax in the meantime.

Mr Price used today’s First Minister’s Questions to point out that it would cost £100 million to allow Welsh councils to freeze council tax and offset last year’s average 4.8% rise.  There is £800 million of unspent funding in this year’s Welsh Government budget,

Citing the Institute for Fiscal Studies’ description of Wales’s council tax system as “out of date, regressive and distortionary”, Mr Price set out Plaid Cymru’s commitment to making council tax fairer and more progressive, adding that under such proposals 20% of households on the lowest incomes would see savings of at least £200.

“Any talk of the pandemic as the great leveller has been completely debunked by the harsh reality facing thousands of families in Wales,” the Plaid Cymru leader said.

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‘Arrears’

“Citizens Advice Cymru have found that Welsh families have been hit by a total of £73 million of arrears due to struggling with rent, energy bills or council tax over the last year. £13 million relates specifically to Council Tax arrears.

“That is why I have urged the Labour Welsh Government to use £100 million of its £800 million unspent funds to freeze council tax right away, making up for last year’s average rise of 4.8%.

“A Plaid Cymru government would go further and reform council tax to make it fairer and more progressive. We will undertake a revaluation, increase the number of bands at the higher end of household evaluations, and ensure that council tax is more proportional to the value of properties.

“We expect that under our proposals 20% of households in the bottom fifth of income distribution will see their council tax fall by more than £200.

“As stated by the Institute of Fiscal Studies which describes Wales’s current council tax model as “out of date, regressive and distortionary”, making council tax proportional to up-to-date values would lead to average bills falling by more than £160 in Merthyr Tydfil, Neath Port Talbot and Blaenau Gwent.

 “This would be a fairer system by far than what Labour has left in place for too long.”