The Chancellor has been warned that council tax rises are “not the answer” as hundreds of thousands of Londoners face £2,000 bills for the first time. Jeremy Hunt is expected to announce more flexibility for councils to raise council tax in his Autumn Statement on Thursday, with plans for 5 per cent rises being discussed by the Treasury. Currently, councils cannot make increases of more than 3 per cent, including the 1 per cent principle for the social care payment, without holding a local referendum. A 5 per cent rise would mean average bills in Bexley, Croydon, Havering, Sutton and Waltham Forest would top £2,000 for the first time in April. Last year payments for Band D households in Harrow and Richmond rose above the figure as they joined Kingston as the only London councils to hit the numbers.
read more
Londoners also pay an average of £400 to City Hall, mainly to fund the Met Police, which could also rise significantly. Adam Hagg, Leader of Westminster City Council said: “My appeal to the Treasury is not to freeze local authority funding. “More powers to raise regressive council tax without a referendum is a sticking plaster and not an answer – it just puts more pressure on people at the worst time in an unequal way.” He added that the government should reform the business rates system and “fast track an online sales tax to restore the absurd advantage” given to online retailers who pay minimum tax in huge warehouses at the expense of local high streets. He said: “If you want a thriving West End back, you need to make sure it can compete on a level playing field.” The bill rises come as Londoners face rising rents and soaring inflation. Hammersmith and Fulham Council leader Stephen Cowan added: “It’s a regressive tax that hits the poorest hardest. The Government should extend council tax support across the country and reform business rates which hit struggling retailers .” Councilor Johnny Thalassites, chief finance member for Kensington & Chelsea, said: “Tackling inflation is rightly the number one priority for the Government, so I understand why the Chancellor is exploring a range of options. “However, I am looking at every possible way to keep taxes and costs down for local residents and hope we never have to raise council tax by up to five per cent. “We are supporting local voluntary organizations in the sector, providing direct funding to households most affected by the rising cost of living and pointing to advice and support on our online cost of living support hub.” Mr Hunt warned Britain would be hit with tax rises and spending cuts as it tries to plug a £60bn black hole in the country’s finances.
