Havering’s Council Tax and the USA’s Alternative

Council tax reflects property values in the 1990s. The promised five yearly value reviews never happened because of political cowardice.

Property tax is reviewed annually in the USA, “…The amount of tax is determined annually based on market value of each property on a particular date.”¹ New Jersey has the highest rate at 1.89% and the lowest is Louisiana’s 0.18%.²21 states are above 1% and then the range is between Louisiana and Florida’s 0.97%.

So what?

The benchmark used for this blog is Maryland, whose tax rate is 0.87%. They are at the USA’s mid-point property tax rate. Havering’s average house price is £451,000.³Using Maryland’s 0.87%, the council tax would be £3,923.70 for an average house, instead of Band D’s £2,313.^4,5

Detached houses in Emerson Park average £1,125,079. Their effective council tax is 0.41% or less.⁵ In Havering, high value houses are under-taxed under the American property tax system.

Council tax is a failed property tax, which is political dynamite. Havering’s Band H houses would have a council tax increase from £5,161 to £9,788 if Maryland’s rate was used.⁶ Havering’s financial woes are 30+ years old. The financial crisis was created by Conservatives and maintained by cowardly successive governments.

Council tax is a sick joke benefitting the rich.

Addendum: Louisiana’s 0.18% property tax

Louisiana is *Third World* in many ways. Life expectancy is 72 years⁷ and literacy is 72.9%.⁸ If Louisiana was a country it would be failed state. It is an example of low tax levels destroying society. (A £3m house in Havering has Louisiana levels of property tax rate as a percentage.)

Notes

1 Property tax in the United States – Wikipedia

2 Property Tax Rates By State 2025 – Tax-Rates.org

3 Housing prices in Havering See also Havering Housing Market | Price trends and market breakdown

4 Council Tax bands and bills | London Borough of Havering

5 House Prices in Emerson Park Two houses are for sale at £3m+ and several at £2m+, which reduces the percentage that council tax represents.

6 A £3m house would pay £26,100 council tax in Maryland instead of £4,627 in Havering.

7 Louisianans’ life expectancy is lower than national average – Axios New Orleans In Britain it’s 87 years Life expectancy calculator – Office for National Statistics

8 Louisiana Literacy Rates – Studyville Literacy in Britain is 99% Literacy Rate in UK Statistics 2025 | Illiteracy Rate UK – The Global Statistics

Havering’s Council Tax: The Rich get Richer

The Council Tax system isn’t fit for purpose.¹ People living in multimillion pound houses are winners. They pay tiny amounts of council tax as a percentage of the value of their property.²

Anomalies for expensive houses

A four-bedroom house in Gidea Park is for sale at £975,000.³ It’s band G. In Upminster another four-bedroom house is available for £1.25m⁴ council band F, which is £515p.a. less. Meanwhile in Emerson Park a five-bedroom house is available for £2m,⁵ council tax band G. This is twice as expensive as the Gidea Park house and in the same council tax band.

Anomalies for cheap houses

A two-bedroom flat in Rainham is available for £134,000⁶ council tax band C. In Romford a retirement property is on sale for £90,000⁷ also band C. The Romford property is one-third cheaper despite being in the same council tax band.

And it goes on and on and on.

The ultimate anomaly

Converting council tax into percentages reveals why it’s a racket.

A five-bedroom house in Emerson Park is available for £2m⁸ at council tax band H. Its council tax is £4,627. At the other end of the scale is a Park Home⁹ in band A paying £1,542.

The first property pays 0.23% of the value of the house. The second pays 1.71%, a massive percentage difference. If council tax was based on the property valuation as a percentage, the Emerson Park property would pay £34,200 instead of £4,625. This equalises the amounts paid.

Council tax isn’t a property tax. It is a thinly disguised crime against the poor.

Notes

1 Council Tax bands and bills | London Borough of Havering

2 For research purposes I surveyed houses for sale until mid-August 2025 on Rightmove and Zoopla. These are headline prices and might increase or decrease but that doesn’t alter the thrust of the discussion.

3 4 bedroom detached house for sale in Main Road, Gidea Park , RM2

4 4 bedroom detached house for sale in The Chase, Upminster, RM14

5 5 bedroom detached house for sale in Woodlands Avenue, Emerson Park, RM11

6 2 bedroom apartment for sale in Blueberry Court, Rainham, RM13 8JY, RM13

7 1 bedroom retirement property for sale in Admiral Lodge, Western Road, Romford, RM1

8 5 bedroom detached house for sale in Ernest Road, Emerson Park, RM11

9 Cummings Hall Lane, Noak Hill… 1 bed park home for sale – £89,995

A tale of two boroughs: Havering and Westminster’s Council Tax

All animals are equal, but some animals are more equal than others. Animal Farm by George Orwell (1945)

Council tax was created by a panics-stricken Conservative government after the Poll Tax riots. Eight bands were created and were meant to be reviewed every five years. George Osborne’s fiscal extremism was the coup de grace for local finance.It destroyed any sense of reality for councillors who have resorted to borrowing to pay current expenditure. The local authority credit cardhas, as it were, been maxed out. Osborne and expanding duties made bankruptcy inevitable with a mountain of debt for future generations. But, as Orwell would have said: not all councils are equal.

The 2025-6 council tax for Westminster is astonishing. Band ‘D’ is the mid-point in the council tax system and they have set the charge at £1,019. 17 miles to the east, and on a different fiscal planet, Havering’s band ‘D’ charge is £2,313.55. This is above band ‘H’ in Westminster.¹

As might be expected, Westminster house prices are very high.² The first house available on Rightmove costs £2.6m. (The second house listed is £80m.) Being immensely rich means Westminster has many more band ‘H’ houses than Havering.³ Many more is a galactic under-statement. Romford constituency has 40 band ‘H’ houses, Hornchurch and Upminster has 320 and Westminster……..15,530!

Obviously their revenue base is huge. Westminster’s band ‘H’ council tax is £2,038. For Havering it is £4,627, which is too low.⁴

Havering has been wrecked by (a) national politicians and their cowardice, (b) Conservative extremism, (c) ever expanding duties for adult services and homelessness and (d) local delusions.

Notes

1 Westminster council tax bands & costs 2025/26

2 Properties For Sale in Westminster | Rightmove

3 d:\Users\Chris\Downloads\CTSOP2_1_adhoc_2015_2024 (1).zip 4 Council Tax bands and bills | London Borough of Havering

4 Council Tax bands and bills | London Borough of Havering

Havering’s Council Tax 2025-6

Havering Council is bankrupt. The usual explanation is the cost of Adult Services and Homelessness. That’s glib. Council Tax was introduced in 1991 by a panic-stricken Conservative government reeling from the Poll Tax riots. They planned valuation reviews every five years, after which council tax would be recalibrated reflecting property price inflation. No reviews have taken place. Areas with massive property price inflation, like Havering, haven’t had council tax adjustments.

Havering’s Council Tax 2025

In 1991 a £320,000+ band ‘H’ house¹ in Havering had a council tax of £1070. This equates to 0.33% of its minimum value.

In 2025 a band ‘H’ property is worth about £2m.³ Council tax for band ‘H’ is £4,627, which is 0.23%. This doesn’t look much but it is a 30% difference.

Council tax has significantly reduced for band ‘H’’ property owners since 1991.

Inflation since 1991

Band ‘H’ houses were valued at £320,000+ in 1991. Using standard inflation, that increased to £733,720 in 2025.⁴ House price inflation is a multiple of standard inflation. A 1991 £320,000+ house is now £2,157,601,⁵ an inflation rate of 574%.

Council Tax is a failure

Political cowardice by governments has bankrupted Havering.⁶ Council tax is a failed mechanism for funding council services.⁷ Continuing to use 1991 valuations is ludicrous.

Correcting 34 years of inertia will take political courage………I’m not holding my breath.

Notes

1 Council Tax bands and bills | London Borough of Havering

2 Properties For Sale in Emerson Park | Rightmove

4 Inflation calculator | Bank of England

5 House price index | Nationwide

6 Havering Council Tax: Is It Too Low? – Politics in Havering This was written in 2020 but the analysis is still valid though the examples are historic.

7 George Osborne’s Age of Austerity programme, 2010-16, put the knife to the throat of Havering’s finances and matters more than sub-optimal increases in council tax.

Havering’s Cabinet, 6th November 2024

Bankruptcy dominates council decision-making. Item 6¹ discussed the unfolding financial situation. Chris Wilkins (28 minutes) introduced the item in his ‘reading a shopping list’ style. Surprisingly, he sounds like a born-again Labour loyalist with a mission to rescue Havering after 14 years of Tory misrule.

The £52m government loan, negotiated with the Conservatives, is inadequate. Chris says the 2025-6 outcome will be minus £73m. Ominously, he (31) identified the Freedom Pass as a pressure point. Havering has many OAPs and the Freedom Pass is very expensive at £8m. Chris could be thinking of that as a ‘savings’ item. If the government does not increase Havering’s funding, Chris might have to consider a huge increase in council tax.

Ray Morgon, Gillian Ford and Chris love lobbying. It’s ludicrous and is the triumph of hope over experience. Ray (33) said the GLA expects 25% of councils to be bankrupt by 2026-7 along with Havering.

“To engage in discussion with the Government regarding a fix to the underlying budget issue the Council faces or agree a further capitalisation direction to allow time for funding reform to be actioned.”²

The recent Labour budget allocated £1.3bn for local government. Ray said Havering should receive good treatment because it’s virtually bankrupt. Interestingly, neither Chris or Ray mentioned that the interest rate for the £52m loan had been reduced by 1%. The 1% saves half million pounds in annual interest payments, which is £200,00 more than closing four libraries.

The government could lift the ‘cap’ on council tax increases, “It is unclear… whether…[the new Government] will allow authorities more flexibility regarding tax increases.”³

Chris won’t welcome empowerment. He prefers being a helpless victim. If the £21m shortfall is funded by council tax increases, it will be dramatic in an election year.

Notes

1 Annotator Player

2 (Public Pack)Agenda Document for Cabinet, 06/11/2024 19:30 para 8.2

“….agree a further capitalisation direction to allow time for funding reform to be actioned.” This means that they intend to borrow long term for current revenue pressures. This is financial insanity.

3 ibid 8.3

Havering’s Bankruptcy and Margaret Thatcher

Thatcherite economics in 1979 was straight-forward. Income tax was reduced and capital assets lightly taxed to reward Conservative voters.¹ Lost revenue was replaced with massive increases in regressive taxes like VAT. George Osborne, a Thatcherite without the brains, introduced The Age of Austerity, 2010-24. His freezing of Council Tax ultimately made Havering bankrupt because lost revenue wasn’t replaced.

Ray Morgon borrowed £52m, at 7%, from the government to replace the lost revenue in 2024. This is like using credit cards for day-to-day spending, which is obviously insane. Worse, the council is selling capital assets to fill the hole Osborne made. (Bankrupt aristocrats call this, ‘selling the family silver.’) It’s a futile tactic to buy time.

In a full year, 2% of council tax will be needed to pay the interest on the loan.

Havering is bankrupt because council tax is too low.². Trivial *cuts* like four libraries reduce the deficit by £300,000.³ Havering’s budget is £180M.

What does inflation, 2010-24 tell us?

General inflation: 61%⁴

House price inflation: 100%+⁵

Council tax inflation: 46.7%⁶

The 2024-25 budget deficit is expected to be £32M.⁷This is caused by Council Tax not being inflation linked. Council Tax is a Property Tax.

House price inflation has been at least 100% because of the magic ofThatcherite economics. Wealth in assets is lightly taxed and rises in value. Or, as the Bible says, The rich get richer.⁸ Born-again Thatcherites like Andrew Rosindell probably know this. Meanwhile pot holes are a symptom of bankruptcy.

Ray Morgan and Gillian Ford should beg government for the freedom to set Havering’s Council Tax.

Notes

1 BBC Budget 97 “In his first [1979] Budget he raised VAT from….8% to a single rate of 15%….an increase in prescription charges from 20p to 45p and a major relaxation of exchange controls.” In the same budget higher rate taxation was reduced from 60% to 40%.

2 Havering Council Tax: Is It Too Low? – Politics in Havering

3 Havering launches new library strategy | London Borough of Havering

4 £1 in 2010 → 2024 | UK Inflation Calculator (in2013dollars.com)

5 House Prices in Hornchurch (rightmove.co.uk) 11 Ravensbourne Crescent, Romford increased 142%. 17 Ravenscourt Grove, Hornchurch increased 117%

6 Previous years’ bands | Council Tax bands and bills | London Borough of Havering Using Band D.

7 Cabinet agrees “toughest budget ever” | London Borough of Havering The actual out-turn won’t be £32M because much expenditure is demand led and not quantifiable accurately.

8 Matthew 25:29

Havering’s Impending Bankruptcy: The Road to Disaster (part two)

Margaret Thatcher’s prime ministership ended after introducing the Poll Tax for council financing. Every property was charged the same amount. A one-bedroom flat was taxed like a mansion. It provoked riots and she lost support in her party.

Panic-stricken, the Conservative government introduced Council Tax. Eight bands, loosely based on 1991¹ evaluations, remain to this day. These valuation bands are supposed to reflect house prices across the country.

The intention was that bands would be reviewed every five years. This would have captured changes in real time. Political cowardice prevented revaluations happening. Winners are happy and losers scream blue murder with obvious electoral consequences. London’s 73 MPs absolutely opposed re-establishing the link between property values and council tax. London’s house prices had rocketed and they didn’t want council tax to double as a consequence.

In Havering, Band D house prices in Rainham have increased eight times since 1991.²The earliest statement of council tax bands are for 1993-4 when band D was set at £535.³ For 2023-4, Band D is £2,088 – four times more.

Havering’s council tax would double if it was a property tax.

Havering’s road to disaster began in 1991. A panic-stricken Conservative government tried to rescue themselves after Margaret Thatcher. They made disastrous decisions, which have lasted 32 years. Havering’s 2023-4 budget raised £149m from council tax.⁴ This should have been a minimum of £300 million. And more if upward revaluations are included.

Havering is a victim of national politics.

Notes

1 How domestic properties are assessed for Council Tax bands – GOV.UK (www.gov.uk)

2 House Prices in Guysfield Drive, Rainham, Havering, London, RM13 (rightmove.co.uk)

3 Previous years’ bands | Council Tax bands and bills | The London Borough Of Havering

4 Decision – The 23/24 Council Budget setting report and 2023-2027 Medium Term Financial Strategy | The London Borough Of Havering

Havering’s Impending Bankruptcy: The Road to Disaster (part one)

Havering’s Strategy Director Kathy Freeman stated: “We are very close to issuing a section 114, [bankruptcy] even six months away from this happening. Our average resources cannot meet the financial requirements.¹

In 2010 Conservative chancellor, George Osborne,² (see addendum) began his attack on local government. Without profiling the financial needs of local government, he capped Council Tax increases to zero%.

Instantly, he demonstrated he didn’t understand two fundamental fiscal principles;

The corrosive impact of inflation
The corrosive impact of the compounding of inflation.

Osborne’s decision was based on ‘something for nothing’.⁴ He talked of ‘waste’ and ‘inefficiencies’ to confuse the electorate. Simultaneously, additional duties and responsibilities were imposed on councils.

Since 2010, British inflation has been 46.88%.⁵Havering’s stand still council tax should have increased at the same pace. In 2010-11 a band D was £1,505. This year, 2023-4, it’s £2,088.13. Inflation linked council tax would have brought the figure to £2,210.56. Havering is minus £122.43 per band D house. There are 107,798 houses in Havering and band D is the average. Osborne’s misunderstanding about inflation has cost Havering approximately £14 million annually.

But the Conservative chancellors weren’t finished with their attack on local government. They reduced government funding. In 2010, Havering received £70 million. In 2023-4, it was £2.9 million. A real reduction of £100 million per year.

The cost of Conservative policies, 2010-23, for Havering is £119 million per year. This is why Havering will probably go bankrupt.

Addendum: Conservative chancellors 2010-23 (their university degree in brackets)

George Osborne (History)
Philip Hammond (Philosophy, politics and economics)
Sajid Javid (Economics and politics)
Rishi Sunak (Philosophy, politics and economics)
Nadhim Zahawi (Chemical engineering)
Kwasi Kwartang (Classics and history)
Jeremy Hunt (Philosophy, politics and economics)

Notes

1 Havering Council balancing on the brink of bankruptcy-A ‘114’ could be issued within months. – The Havering Daily

2 Osborne was educated at private schools: George Osborne – Wikipedia

3 Council funding for taxi trips for Havering school children with special needs to cease (taxi-point.co.uk) “….reimbursement for fuel or a trip via ride-hailing service Uber would cost approximately £30 per day….disabled children will experience changes, ‘appropriate measures’ will be taken to ensure their needs are appropriately addressed.” The human cost of bankruptcy. The weakest and most vulnerable suffer first

4 The 2016 Brexit referendum ‘battle-bus’ is identical with the false claim that leaving the EU would ‘free up’ £350m a week for the NHS.

5 Inflation calculator | Bank of England

Havering’s Council Tax: The Government’s Exemption Policies

Ray Morgon uses apocalyptic language when discussing government funding. In 2010, before the Conservatives’ Age of Austerity, Havering received £70m. This was reduced to £2.9m in 2023. A £100m per year reduction when corrected for inflation.¹Religious buildings are zero rated for business rates and charity shops pay only 20%. Havering’s finances are damaged by these exemptions.

Uncosted exemptions reflect prejudices of by-gone eras.² The government imposes exemptions for religious buildings without compensation for the council.³ Voters haven’t a say as to whether they want to subsidise religions.⁴

“….belief in ‘a god’ in the UK is low. Only a quarter of Britons (27%) say they actually believe in ‘a god’. A further one in six (16%) believe in the existence of ‘a higher spiritual power’, but not ‘a god’.”⁵

As 73% of people aren’t religious, why do tax exemptions exist? It isn’t obvious why churches should get financial support from Havering.

Charities are different. Local charities command general support. St Francis Hospice is a well-loved charity in Havering. Their shops provide funds beyond normal charitable giving. Their accounts don’t acknowledge the value of the 80% business rate reduction. However, their reserves of £19.44m are helped by those reductions.⁶

Havering has had massive reductions in annual funding but can’t maximise its tax base. Government decisions about religion and charities are paid for by Havering’s taxpayers.

Notes

1 Inflation calculator | Bank of England

2 There are 110 Christian buildings in Havering which don’t pay business rates. Havering’s flagship church is St Edward’s, Romford. Its financial statement reveals the building is worth £16.24m and they have reserves of £318,000 de5291_4413260d7c764342a5681c27d3be80a8.pdf (stedwardsromford.com)

3 There are 7 charity shops on Hornchurch High Street charity shops in hornchurch – Search (bing.com) They don’t pay VAT and so have further commercial advantages. See VAT for charities: Overview – GOV.UK (www.gov.uk)

4 See Havering Council and Religious Diversity – Politics in Havering

5 How religious are British people? | YouGov

6 388190336.pdf (sfh.org.uk) See also do charities pay business rates uk – Search (bing.com)

Havering’s Budget: Between a Rock and Hard Place

Havering’s administration is delusional. They refuse to accept that government underfunding of Havering is policy. The government is in perma-turmoil and their policies are too.¹ The administration ignores all the evidence and asks MPs to assist. It’s as if Havering’s MPs are an unknown.²

On consecutive nights, government underfunding was demonstrated.^3,4On the 7^th February, officers used many slides showing the iniquities of Outer London’s funding formula. Havering is hardest hit because of our peculiar demographics.

Gillian Ford is a fan of lobbying despite knowing the funding formula hasn’t changed since 2013.⁵ Oscar Ford focused on demographic changes in Havering with costs associated with increasing the numbers of children.⁶ Lobbying won’t change anything. Paul McGeary said rents only increased by 7% instead of 13.6% because of government intervention. A government decision to reduce rent increases from 13.6% to 7% was for Housing Benefits⁷ reasons not to help tenants during the cost-of-living crisis.

The council should lobby to increase the council tax cap.⁸ An increase to 10% would mean Havering avoiding bankruptcy in 2026. Lobbying to avoid bankruptcy would embarrass the government. It’s high-risk but death by a 1,000 government generated cuts is worse. Government will blame Havering whatever decisions are made. Why not take the battle to the government and pillory them for capricious incompetence?

Notes

1 Three Prime Ministers and four Chancellors of the Exchequer

2 Julia Lopez is a minister and wont bite the hand that feeds her. Andrew Rosindell’s a veteran MP who always supports the government on financial matters.

3 Overview and Scrutiny Board meeting 7^th February 2023 Annotator Player (sonicfoundry.com)

4 Cabinet meeting 8^th February 2023 Annotator Player (sonicfoundry.com)

5 Go to 38-43 mins where she cites two organisations, which, allegedly, have influence

6 Go to 45 minutes. He says the government is “incapable”. This implies he knows the government is incompetent insofar as they don’t understand their own policy.

7 At 9 minutes

8 Four bankrupt councils have increased their council tax by 10%+. They were all bankrupted by searching for additional revenue to pay for statutory services through commercial activities. They all failed