Revealed: Tory stealth council tax hike will leave households £300 a year worse off, Labour warns ahead of local elections

New analysis by Labour released ahead of next month’s local government elections reveals the scale of Tory stealth council tax hikes, with average households set to be £300 a year worse off in council tax.

The Tory Government has made three changes to the system for council tax since 2019, with the government baking in higher council tax rises to cover the cost of their economic failure. As of next month, the £5 billion hike means families will already be £140 worse off than they were just four years ago, soaring further to £300 worse off in the next parliament.

Officials warned local authority leaders that they expect the maximum 4.99% increase to be applied to council tax bills from April this year, with Levelling Up Secretary Michael Gove greenlighting through the House of Commons that the Tories are coming for the council tax of every house in the country.

By 2029, households will have paid £1,350 more in council tax, because of the Tory tax plans.

Despite the Prime Minister insisting that he is lowering taxes, OECD data proves that the UK’s tax level across the economy has increased to its highest rate on record and Labour analysis shows that the average family will still be £870 worse off despite the Spring Budget measures.

The Labour Party is ready to fight local elections on the economy by offering long-term change to deliver more jobs, more investment and to cut people’s bills.

Darren Jones MP, Labour’s Shadow Chief Secretary to the Treasury, said:

“The Tories have left working people paying more for less, with council tax bills soaring by £140 since just 2019 and that increase set to double in the next Parliament. Michael Gove has told not just the House of Commons but every house in the country that he is coming for their council tax — give with one hand, Gove with the other.

“This latest Tory tax betrayal is another blow to already tight family finances. If you look around Britain and see our public services, there is no way that taxpayers are getting the high-quality services they should expect with soaring levels of taxation.

“Families can’t afford another five years of the Tories. The Prime Minister needs to stop taking with one hand and giving with another, call an election and let Labour finally get our economy growing after 14 years of decline.

Ends.

Notes:

• In spending round 2020 the then Chancellor Rishi Sunak said “Local authorities will have extra flexibility for Council Tax and Adult Social Care precept”. (link)
• The OBR, in their forecast, noted that this applied in 2021/22 with some deferral to 2022/23, and that it would raise £1.0bn a year on average from 2022/23 onwards. (paragraph 3.57).
• In the October 2021 budget, councils were given  the ability to increase the adult social care precept by a further 1 per cent each year from 2022/23 to 2024/25. This was estimated to have increased council tax receipts by £1.2bn by the end of the forecast period. (paragraph 3.43)
• In the November 2022 Autumn Statement, the Chancellor Jeremy Hunt announced that the extra flexibilities would now extend through to 2027/28. The OBR forecast that this measure would raise £4.8bn a year by 2027/28. (paragraph 38)
• The OBR’s policy measures database provides information on how much each of these three policy changes will raise in each year of the forecast period. Table below, incorporating per household figures based on the number of households in England. (OBR policy measures database) (English Housing Survey).

• From April, households will be paying £140 more a year in council tax on average because of the Tories tax plans
• The Tories tax plans mean that households will be paying £300 more a year in council tax on average
• By 2029, households will have paid £1,350 more in council tax  because of the Tories tax plans
• Officials warned local authority leaders that they expect the maximum 4.99% increase to be applied to council tax bills from April https://www.lbc.co.uk/news/council-tax-hikes-april-levelling-up/

 Table 1: