Tories pledge two-year council tax freeze » Local Government » 24dash.com

Shadow Chancellor George Osborne today announced a future Tory Government will enable town halls to freeze council tax for two years.

The surprise move, unveiled to cheers at the Tory conference, would save a typical Band D household over £200.

It will be paid for by Whitehall providing extra funding if councils keep their prospective council tax rises to 2.5% or below - effectively wiping out the increase

The freeze is aimed at helping families cope with the rising cost of living sparked by recent economic turmoil.

In his keynote conference speech, Mr Osborne said: "The country may not be able to afford upfront tax cuts because borrowing is too high but families facing the squeeze cannot afford tax rises either.

"So we're going to go into partnership with local councils. If they find matching savings in their town hall, we will give them these savings from Whitehall."

To cheers, he said: "The next Conservative Government will freeze your council tax for at least two years.

"Every council tax bill of every family in every council that takes part will be frozen.

"Instead of council tax bills that rise year after year, under Labour, millions of families will get help at the time that they need it most.

"Conservatives will not leave people to struggle with the credit crunch alone. We won't walk on by. We will help families over this crisis."

Rapidly rising council tax bills have sparked anger among householders, especially pensioners on fixed incomes, at a time of growing fuel and food bills

According to the Conservatives, council tax in England has more than doubled under Labour, with the average bill rising to £1,374 a year.

Under the plan unveiled by Mr Osborne, if councils keep their council tax rises to 2.5% or below, central government will provide additional funding found from savings in the consultancy and advertising budgets to pay for a 2.5% cut in council tax.

The deal effectively cancels out the increase allowing qualifying councils to freeze, or even reduce, council tax for two years in a row.

Councils that reject the contract will be free to set their own tax levels - subject to a possible local referendum if they want "excessive"
rises.

The cost of reducing council tax in England by 2.5% is around £500 million in the first year and £1 billion in subsequent years.

Later, Mr Osborne told reporters: "I wanted to demonstrate that the Conservative Party can offer something to the many, many millions of families that are struggling at the moment, households for whom a rise in council tax at this time is a real blow."

Asked how councils would be able to keep to the 2.5% target, he said: "I think there's plenty of opportunity in local government - as there is in central government - to find savings."

He added: "I think this is exactly what the country wants to hear at a time of enormous anxiety."

Reacting to today’s announcement independent think tank New Local Government Network said that the short-term plan would not fix the inherent problems of the tax.

Director, Chris Leslie, said: "Council tax is broken and it needs urgent attention. We need more detail from George Osborne on where exactly the savings would come from to pay for this council tax freeze.

"Efficiency drives have targeted 'consultancy' budgets before but with little success.

"It is also impossible to say which councils could participate in such a 'deal' with the government without knowing the central grant settlement figures for these years in the future.

"All political parties need to be much bolder on council tax and local government finance reform. Until councils have alternative revenue  sources to take pressure off their residents, the risk of continued unfairness persists."

Chief Secretary to the Treasury Yvette Cooper said: "George Osborne had his chance to say what the Tories would do about Bradford & Bingley and the huge problems facing the global financial system.

"He blew it. We heard nothing about how they would deal with the greatest financial shock to hit the world for decades.

"George Osborne's council tax pledge is a con - it could only be introduced if local councils make big cuts in public services. They have failed to set out where any savings would come from.

"George Osborne said he wanted to cut borrowing but offered no policies to deliver this. Instead his economic plan still promises billions of tax cuts and today they added billions more in spending commitments such as new high-speed rail links.

"Just as George Osborne is talking nonsense on banking, he is talking nonsense on the public finances too."

Kate Jopling, head of public affairs for Help the Aged, said: "Many older people will welcome talk of freezing council tax - year-on-year hikes put a massive strain on older people's finances.

"But a more permanent long-term solution to rising council tax is needed desperately. An extra 822 pensioners are forced into poverty each day - so council tax coupled with the soaring cost of living is taking its toll."