Conservatives usher in biggest council tax rise for 14 years

THE Conservatives have bowed to pressure over austerity and relaxed a cap on council tax rises in a move that means household bills may rise by up to £200.

Sajid Javid, the Local Government Secretary, yesterday announced that councils will be able to raise their bills by up to 6 per cent, the biggest increase for 14 years.

Tory MPS yesterday warned that the move will “squeeze” households that are already struggling to cope with pay freezes at a time when inflation is running at 3.1 per cent.

Jacob Rees-mogg said: “Council tax falls very heavily on those with fixed incomes. No one would want a return to the Blair-brown era of stealth taxes. This should be approached with caution.”

Most council tax bills were frozen in 2012 when the coalition government introduced a rule that meant any proposal to increase the tax by 2 per cent or more in England must be put to a local referendum. However bills have been rising steadily since 2015, when George Osborne, the former chancellor, gave councils the power to charge an additional social care premium.

Councils can now use the premium to increase bills by 3 per cent, while Mr Javid yesterday eased the referendum rule to allow councils to hike bills by an additional 3 per cent. The changes mean that a typical Band D property council tax bill will rise from £1,591 to £1,698 next year, an increase of £107. For properties worth more than £320,000 in Band H, council tax bills will rise by £203 to £3,385.

It represents the biggest rise in council tax bills since 2003, under Tony Blair, when they rose by more than 11 per cent.

Bob Blackman, a Tory MP, said: “I have worries about the impact on

hard-pressed council taxpayers who are in a position where many of them, particularly those on low salaries, council tax is quite a big chunk of their money.

“I would be urging any local authority to look at efficiency savings so they don’t need to raise the council tax in this way.

“It’s a squeeze on people struggling to pay their way. We should be seen to be the low tax party.”

Despite the scale of the increases, councils said that they still need more money to plug the gap in their budgets.

Lord Porter, the chairman of the Local Government Association, said: “Greater flexibility for local authorities in setting council tax levels will give some councils the option of raising extra money to offset some of the financial pressures they face next year. With no other national tax subject to referendums, the council tax referendum limit needs to be abolished so councils and their communities can decide how under-pressure local services are paid for, with residents able to democratically hold their council to account through the ballot box.” Retirees’ disposable incomes have risen twice as fast as working-age groups, but they have also faced a higher rise in costs, new data shows.

The Office for National Statistics found that, on average, workers saw their disposable income rise by 26pc over the past decade, but that was outstripped by costs which rose 27pc,

Costs for retirees, compared to workers, rose by an additional 5pc, to 32pc, but this was better counteracted by a 49pc increase in incomes between 2006 and 2016.