NIESR urges Reeves to consider replacing council tax with land value tax, saying it would raise money and be ‘much fairer’<\/p>\n
In an interview with the Today programme about the National Institute of Economic and Social Research<\/strong>\u2019s report about the chancellor\u2019s budget trilemma (see 9.39am<\/a>), Prof Stephen Millard<\/strong>, the NIESR\u2019s deputy director for macroeconomics, argued that Rachel Reeves should consider reforming council tax. He said:<\/p>\n The council tax system is a mess, really. Houses have not been revalued since 1991. The system is ripe for a complete reform.<\/p>\n The question there is whether reforming the council tax system, getting it right, would necessarily raise any additional money.<\/p>\n An alternative is to replace the whole thing with a land value tax, which is much fairer and which potentially could actually raise a significant amount of money.<\/p>\n<\/blockquote>\n During the general election Labour said it was not planning to reform council tax<\/a>, and it ruled out rebanding properties, but it did give a firm commitment not to alter the system.<\/p>\n Share<\/a><\/p>\n Key events<\/p>\n Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/p>\n Reeves faces ‘impossible trilemma’ in budget, says NIESR thinktank<\/p>\n The National Institute of Economic and Social Research<\/strong> (NIESR), the thinktank saying Rachel Reeves will need to raise taxes to cover a \u00a340bn deficit in the public finances (see 9.13am<\/a>), says that the chancellor faces \u201can impossible trilemma\u201d.<\/p>\n In his foreward to the report<\/a>, David Aikman<\/strong>, the NIESR director, says:<\/p>\n The UK economy enters the second half of 2025 still confronting weak growth and stubborn inflationary pressures. While external factors \u2013 including continued trade policy uncertainty and persistent geopolitical risks \u2013 certainly matter, domestic challenges dominate the outlook. Chief among these is the government\u2019s increasingly acute fiscal predicament. Simply put, the chancellor cannot simultaneously meet her fiscal rules, fulfil spending commitments, and uphold manifesto promises to avoid tax rises for working people. At least one of these will need to be dropped \u2013 she faces an impossible trilemma.<\/p>\n<\/blockquote>\n But it is not really a trilemma, Aikman suggests, because he argues that two of these options are not feasible.<\/p>\n The government is no longer on track to meet its \u201cstability rule\u201d, with our forecast suggesting a current deficit of \u00a341.2bn in the fiscal year 2029\u201330. With the autumn budget approaching, the chancellor faces unenviable decisions. The spending review has already set departmental budgets tightly until 2029, limiting scope for further cuts. Meanwhile, manifesto commitments restrict the options for tax increases. This leaves the government either breaching its fiscal rules \u2013 risking higher borrowing costs or even market instability \u2013 or making politically difficult and economically damaging compromises at a time when \u2026 the poorest 10% of UK households face a further decline in their living standards this year.<\/p>\n Our view is that it will be crucial for the chancellor to restore market confidence by demonstrating fiscal discipline. This will require a determined attempt to rebuild the fiscal buffer and that will inevitably involve gradual but sustained tax increases or spending cuts. In charting this path, the government must prioritise protecting public expenditure that supports society\u2019s most vulnerable, while safeguarding public investment essential for sustainable future growth.<\/p>\n<\/blockquote>\n Share<\/a>Rachel Reeves needs to put up taxes to cover \u00a340bn deficit, thinktank says<\/p>\n Rachel Reeves<\/a> will need to raise taxes to close a government spending gap that is on course to reach more than \u00a340bn after a slowdown in economic growth and higher-than-expected inflation, according to the National Institute of Economic and Social Research<\/strong> (NIESR), a thinktank. Phillip Inman<\/strong> has the story.<\/p>\n Share<\/a>\u2018Worrying\u2019 levels of screen time means young people losing confidence to socialise in person, Lisa Nandy warns<\/p>\n Good morning. Keir Starmer is out on a visit today and he will be doing broadcast interviews. It may be the only time we hear from him this week, and there is no shortage of topics that journalists will want to ask him about. By the end of the day we may get new, or newish, lines on Gaza, the \u201cone in, one out\u201d returns deal with France, tax rises and the black hole in the government\u2019s finances (priced at more than \u00a340bn, according to a report from a well-respected thinktank today<\/a>), Ukraine, the case for and against disclosing suspects\u2019 immigration status and the demonstration planned for this weekend against the decision to proscribe Palestine Action.<\/p>\n But Starmer wants to talk about something else \u2013 less party political, less \u2018Westminster agenda\u2019, but arguably as or even more important than these other topics: what the internet is doing to our children.<\/p>\n Officially, Starmer and Lisa Nandy<\/a>, the culture secretary, are just announcing an \u00a388m investment in youth clubs. But they also want to talk about what they suggest is the harm being done by social media to children, who they say are spending so much time on their screens that they are losing the ability to socialise in person with other people.<\/p>\n In a statement in the government\u2019s news release<\/a> about the funding, Starmer<\/strong> says:<\/p>\n Growing up today is hard for young people. As they navigate their way through the online world, too often they find themselves isolated at home and disconnected from their communities.<\/p>\n As a government, we have a duty to act on this worrying trend. Today\u2019s investment is about offering a better alternative: transformative, real-world opportunities that will have an impact in communities across the country, so young people can discover something new, find their spark and develop the confidence and life skills that no algorithm can teach.<\/p>\n<\/blockquote>\n In an interview on the Today programme, Nandy<\/strong> was asked to elaborate on what this \u201cworrying trend\u201d was. She replied:<\/p>\n It keeps me awake at night. We when we were first elected into government last year, one of the first things that I did was to appoint a group of young people to oversee the first national youth strategy in several decades. I was astonished to find that we didn\u2019t have one.<\/p>\n What we found through that process is that the majority of young people \u2013 and it does appear to be a majority \u2013 spend all, or almost all, of their free time alone in their bedrooms, online, and are losing their confidence to connect to people in the real world.<\/p>\n A significant number of them say that they have no adult in the world who they would trust to help and support them. That is really, really concerning.<\/p>\n And one of the reasons that we\u2019re announcing this funding today is to open up opportunities to young people in youth clubs and in schools to live richer, larger lives because there is a pressing need for our generation to step up and help before it\u2019s too late.<\/p>\n<\/blockquote>\n Here\u2019s Eleni Courea<\/strong>\u2019s overnight story about the initiative.<\/p>\n I will post more from Nandy\u2019s interviews soon.<\/p>\n The Starmer visit is taking place in Hertfordshire this morning. Other than that, the diary is relatively empty, but, of course, that does not mean there will be nothing to cover; news is not always predictable.<\/p>\n If you want to contact me, please post a message below the line when comments are open (normally between 10am and 3pm at the moment), or message me on social media. I can\u2019t read all the messages BTL, but if you put \u201cAndrew\u201d in a message aimed at me, I am more likely to see it because I search for posts containing that word.<\/p>\n If you want to flag something up urgently, it is best to use social media. You can reach me on Bluesky at @andrewsparrowgdn.bsky.social. The Guardian has given up posting from its official accounts on X<\/a>, but individual Guardian journalists are there, I still have my account, and if you message me there at @AndrewSparrow, I will see it and respond if necessary.<\/p>\n I find it very helpful when readers point out mistakes, even minor typos. No error is too small to correct. And I find your questions very interesting too. I can\u2019t promise to reply to them all, but I will try to reply to as many as I can, either BTL or sometimes in the blog.<\/p>\n\n
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