A Conservative MP, a peer, a campaigner for affordable housing and a senior property journalist on The Times all spoke in favour of a proportional property tax at a Conservative party conference fringe event hosted by leading centre right think tank, Bright Blue.

Alongside Andrew Dixon, founder, and chair of Fairer Share, on the panel for the event were Aaron Bell, Conservative MP for Newcastle-under-Lyme; Lord Willetts, President of the Resolution Foundation; Anya Martin, Director of Priced Out; and Carol Lewis, Deputy Property Editor at the Times and The Sunday Times. 

The discussion covered the unfairness of the present system, how the introduction of proportional property tax would be consistent with Conservative party values, why it would also make electoral sense for the party to support PPT and why successive governments have shied away from much-needed property tax reform. 

The consensus was that the time has come for action on our unfair property taxes. Or as Aaron put it: “If not now, when?” 

Current challenges

Bright Blue’s Phoebe Arslanagić-Wakefield, summarised the current challenges, “There is now a consensus that Council Tax is poorly designed. The valuation has not been updated since the ’90s. And that’s despite the astronomical boom and house prices we’ve seen since then, especially in the South. That has led to serious regional imbalances in terms of the burden that Council Tax presents to taxpayers, surely an important question for the Conservatives in terms of levelling up. Many economists argue that Stamp Duty impedes and distorts housing prices, making it more difficult for homeowners to decide to downsize or indeed move up the housing ladder and slowing down the market.”


There was widespread agreement that the present system is not working and that a proportional property tax is a much fairer solution.

Aaron gave the example of households owning a £100,000 property in his constituency. “There are plenty of £100,000 properties in Newcastle-under-Lyme. They pay five times more (in Council Tax) as a proportion of property value than someone who owns a million-pound house down in London. So, there is a real unfairness there,” he said.

Anya described the current system of property taxation as “totally backwards”. She noted that Stamp Duty discourages and disincentivizes housing transactions and that Council Tax is equally bad. 

She said: “It’s unfair you can tax properties worth millions of pounds at a higher rate even than small family homes in Sunderland or wherever. These two taxes jointly make moving very expensive and staying very cheap, even if you’re occupying more space than you actually need or even want in very high-demand areas. 

“So, it’s bad for people who want to move, it’s bad for the distribution of homes, it’s bad for under occupation and overcrowding, and it’s bad for the supply of homes as well, because it incentivizes people to have second homes or even leave homes empty when actually you could incentivize them to do otherwise, which is why we support Fairer Share.”

Similarly, Carol stated: “I am in favour (of the Proportional Property Tax) because I think it’s a lot, lot fairer than what we’ve got…I think what we want is we want more people to be able to own property so that they can bequeath it to their children, and that’s ultimately what we’re trying to achieve here. Rather than have the huge divide between those who have and can inherit and those who can’t and won’t.”

Tory values

Lord Willets also explained to delegates how the introduction of proportional property tax would be consistent with Conservative party values. 

He said: “Property-owning democracy is one of the great Tory slogans. And when I was working for Margaret Thatcher in the 1980s, we had council house sales, and ownership of property and ownership of shares spread. 

“I think one of the long-term challenges facing our party is the retreat of property ownership so that younger people are less likely to own a property. This is very dangerous for the long-term future of conservatism. We’ve got to help young people get started on the housing ladder, and this tax would bring more houses onto the market and would mean that people in low-value houses will not be paying so much tax.”

In a similar vein, Aaron added, “If we don’t start trying to work out how we can treat the younger generation more fairly in these matters, then they’re not going to grow up to be Conservatives.”

Anya reminded the audience that “young people are very, very angry about their housing circumstances.”

Vote winner

Carol summarised the audience of the key benefits, “75% of households would be better off. £6.5 billion per year being saved by Council Taxpayers outside London. Up to 600,000 homes would be released into the market over the course of the next five years. And we would see a £3.27 billion per year increase in GDP from the increased housing market.”

As well as being consistent with Tory values, Aaron argued that it made electoral sense for the party to support the Proportional Property Tax.

He said: “I don’t see any reason why the Conservative Party couldn’t do this and especially when they have a very large majority, and actually, I think this is a policy that does attract widespread support from anyone who listens and thinks about it. 

“We’ve got here is a load of MPs who can make a lot of noise on behalf of the winners, because we’ve suddenly got a lot of MPs, who will be represented constituencies where 99% of people are winners, and that’ll put more money in their pockets and more money into our local economies.”

He added: “If we don’t look at this and the Labour Party gets there first, how are we going to argue against that? And how much damage is that going to do in all the seats that we’ve won? We’ve got to hold on to seats like mine if we’re going to have a majority next time.”

Fear factor

Lord Willets set out a key reason why the current system has remined in place, despite its clear shortcomings. 

“Council Tax goes back to one of the biggest traumas in the history of the post-war Conservative Party,” he said. “There are people around, you can watch their faces turn pale when you talk about Council Tax… There’s a kind of almost irrational fear now of doing anything about this because it was also painful in the 1980s.”

“I think there are quite a few people in the Treasury who would like just to get some rather better capital taxes than we have now. So, I think it is now an issue that can be approached, provided we realize there are people out there with post-traumatic stress syndrome who will need massive calming down through the process.”

On the same theme, Aaron suggested ministers lack the courage to take action.

Now is the time

Carol said the time had come for ministers to take action on property taxes. “I think 30 years without addressing it – it’s time to do it. Now is the time. We can’t wait another 20, 30 years. I think the Conservatives are going to have to do it,” she said.

Lord Willetts gave a compelling reason why the time has come to reform property taxes. He said: “The total wealth we had, our houses, and our pensions used to be three times our national income. They now reach seven times our national income.” He added that this means that “if you are looking around for taxes that you need to raise, it is striking how the proportion of GDP taken in taxes on property in the broadest sense has not gone up at all. This policy is in the political interests of the Conservative Party. It makes both economic and political sense.”

Anya captured the mood, “We need to abolish Stamp Duty. We need to reform Council Tax, replacing them with the Proportional Property Tax. It’s a really fantastic policy.”

Aaron also pointed rising property values as a key reason for reform. “The fact is that no government had the courage to revalue council tax ever since 1990, in which time property values have soared in the south east… There’s a real unfairness issue that I think is long overdue for addressing,” he said.

He also said his party should act now if they are to help voters in the red wall seats that the party won in the last election.

“If not, now, when? We’ve got representation in seats we’ve never represented before. We’re representing lots of people who live in £50,000 houses, £30,000 houses, who are being essentially screwed over by the system. And it’s time we did something about that.”


You can watch the event in full below: