A former special adviser to PM Gordon Brown has called for councils to be given radical new powers and replace council tax. Chris Wales, a former adviser to the prime minister on taxation, used a think-tank seminar to call for local authorities to be given the power to set the basic rate of income tax. He also called for a national property tax. His ideas were set out at the Smith Institute, which has close links to Mr Brown, and is regarded within Whitehall as the prime minister's alternative policy unit. He highlighted that council tax was likely to be reviewed next year as part of a report by Professor Sir James Mirrlees for the Institute for Fiscal Studies into the ‘architecture' of the tax system. A number of options are being considered for council tax following the review by Sir Michael Lyons. Sir Michael called for changes to improve fairness of council tax, and greater transparency in the funding system by being clear about the contribution made by national taxation. It could spark a move towards the US system, where states are able to set their own taxes alongside federal levies. Seven states, including Florida and Nevada, do not set personal taxation. He described the current system, created by the Conservative administration, as an ‘unpopular tax, seriously flawed and the subject of serial tinkering'. Mr Wales, who now works in the private sector, said England should look to Scotland's example and make local authorities bigger. He said: ‘Allocate the basic rate of tax to the new authorities and give them the power to vary it… Take council tax away from local authorities and make it a national property tax, easier to administer, and easier to administer more fairly.'
