Labour shadow minister Chris Williamson said his plan to raid wealthier properties with a major tax-grab was one answer to “relentless” austerity suffered by local councils.
Mr Williamson insisted his ‘Differential Progressive Council Tax’ plot would win votes in local referendums – needed in able to implement such a rise – as it was about local budgets “for the many, not the few”.
But he admitted he was disappointed none of the party’s councils has yet backed the idea, amid fears that it would prove too radial and unpopular with voters.
The MP for Derby North stressed his proposal was not official party policy and would be up to local parties to adopt.
He said: “Unless the Government has a change of heart, this could be the only way of arresting the cuts and generating some income to start to grow local services. Obviously it would be up to the local area.
“There is a lot of support for it. Regrettably no local authority has taken the plunge and implemented it yet. I can understand the anxiety because it would no doubt attract a lot of adverse publicity.”
Mr Williamson, shadow minister for Fire and Emergency Services, wants Labour councils to add a sliding rate of council tax to Band D properties and above, starting at 20 per cent but rising to 100 per cent for those in Band H properties.
The plan would involve freezing council tax for properties rated in Bands A to C, which were worth less than £68,000 when valued in 1991.
Homes in B and D worth between £68,000 and £88,000 in 1991, which are considered “average” by Whitehall but viewed as “affluent” by Labour, would be targeted with increases.
Thirty-four per cent of properties in England are Band D or above, meaning eight million households would see council tax hiked by at least 20 per cent.
For those living in the nearly four million properties in Band D alone, the plans would add £320 a year to the average bill.
Those residing in the more than two million properties which are Band F and above would see a rise of more than 50 per cent.
And the 271 households currently on Band H would have their council tax double.
Councils across the country are currently setting their tax rates and budgets for the coming year, with many including Tory boroughs set to use new freedoms to increase bills by up to 5.99 per cent to meet social care costs.
Communities Secretary Sajid Javid is set to confirm plans which councils say offer inadequate funding, with many warning council tax bills will have to go up by up to £200 a year, the highest rise in 14 years.
The proposal seeks to exploit Section 10 of the 2012 Local Government Finance Act 2012, which added a new power allowing councils to reduce a person’s liability to pay in accordance with the authority’s Council Tax Reduction Scheme. The power states that liability may be reduced “to such an extent as the billing authority thinks fit”.
Mr Williamson added that to curb the impact on poorer homeowners living in expensive properties, a council tax discount scheme would need to be funded by the whole project.
He said: “The benefit of this is that it also enables you to ensure that somebody who is asset rich but income poor could be protected through a local council tax support scheme.
“What you couldn’t have is a situation where somebody is on a widow’s pension in a big house and gets a big bill that would be an untenable scenario. And it would undermine the whole concept of the proposal.
“This would give them the resources to give a greater priority to a more general council tax support scheme so that everybody in that situation was entirely protected.”