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Council Tax: Government’s Proposed Increase
25 January 2021
Lead MP
Steve Reed
Debate Type
General Debate
Tags
EconomyLocal Government
Other Contributors: 50
At a Glance
Steve Reed raised concerns about council tax: government’s proposed increase in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The debate calls on the Prime Minister to drop the Government’s plans to force local councils to increase council tax during a pandemic by providing councils with funding. The planned rise is economically illiterate, dishonest, and will clobber hard-pressed families after the country's worst recession due to government mistakes. It leaves councils with a £2.5 billion funding gap and forces cuts despite an increased tax hike.
Steve Reed
Lab Co-op
Streatham and Croydon North
The Government’s failure has left Britain in the worst recession and one of the highest death rates. The proposed council tax increase will hit families who are worried about their future job security or income falling, making it even worse given 2 million people coming off furlough. It deepens the postcode lottery for social care by raising less money in poorer areas.
Peter Dowd
Lab
Bootle
Local authorities are not funded adequately, despite dire circumstances. The Government continues to cut funding for local government and dump on them during the pandemic. Council tax increases will vary across different parts of the country, with some seeing much higher increases than others.
Commends the whole sector for its response to the pandemic, emphasising the sincerity of the Secretary of State and the tailored support schemes put in place. Acknowledges the exceptional knowledge and dedication of the local government finance team at the Department, noting a fair balance has been struck between central and local government costs. Mentions that some authorities have faced external challenges such as cyber-attacks but others have made poor decisions for which they cannot blame central Government.
Mike Kane
Lab
Wythenshawe and Sale East
Critiques the impact of proposed cuts on Manchester City Council and Trafford Council, citing a £50 million budget hole in Manchester's case. Praises local authorities for their response to Storm Christoph but warns that future responses will be harder due to the scale of cuts proposed by the Government. Highlights the financial struggles faced by Trafford Council with a funding gap exceeding 20% of its revenue budget and the impact on residents through increased council tax.
Describes Somerset County Council's mismanagement and financial practices, criticising it for overpaying Skanska by more than £300,000. Questions the transparency of Somerset County Council regarding how funds from the pandemic grant have been used and expresses lack of trust in the council due to its failure to provide a precise breakdown of expenditure.
Gill Furniss
Lab
Sheffield Brightside and Hillsborough
The Government’s proposals are inadequate. A 3% increase would contribute only £6.6 million to Sheffield's adult social care costs next year, with a further 2% contributing only £4.4 million. The policy benefits wealthier areas over deprived ones. Hundreds of thousands of families across the country face pressures from these policies.
The reality is that Conservative councils on average set lower council tax rates than Labour councils, and since 2010 we have ensured that council tax has fallen in real terms. However, many decisions are taken locally where taxpayers do not always get the value for money they deserve. An example of this wasteful spending can be seen with Robin Hood Energy in Nottingham.
Tan Dhesi
Lab
Slough
As a former councillor, I am extremely grateful to take part in today’s debate on council tax increases. The proposed increase of up to 5% is morally wrong and economically illiterate. In Slough, an increase of £88 would mean the difference between turning on the heating or sitting in the cold; or between eating three meals a day or going hungry.
Liam Byrne
Lab
Birmingham Hodge Hill
Stressed the human impact of the pandemic, highlighted financial warnings to the Government last May regarding £282 million in costs for Birmingham, criticised the Government's underfunding and subsequent 4.99% council tax increase in Birmingham, and urged the Government to reconsider their stance.
Argued that Labour councils often spend money extravagantly despite receiving higher central grants compared to Conservative-run councils like Wandsworth; emphasised that local authorities should look at their expenditure to control council tax rises, and suggested that the Government's support should not shield inefficient spending.
Shabana Mahmood
Lab
Birmingham Ladywood
Criticised the Government for going back on promises of financial aid during the pandemic, highlighted Birmingham's £207 million shortfall and additional costs in social care, education, PPE, business rates loss, council tax receipts loss; questioned the sustainability of current funding methods and urged a sustainable solution to adult social care funding.
Mike Wood
Con
Kingswinford and South Staffordshire
I had the honour of being a local councillor in Dudley, including serving as shadow finance cabinet member. I am amazed at Labour's record on council tax when running Dudley Council and nationally; Dudley’s council tax rose by more than 45% under Labour. As a Conservative MP, I want taxes to be as low as possible for hard-working families but acknowledge that services must be paid for. My brother works in social care; the cost of which needs to be shared between central government, local government and those who benefit most directly. A 1% increase in council tax for social care raises less than £40 per year for a household in Dudley, essential while considering long-term reform.
Paula Barker
Lab
Liverpool Wavertree
I spent my entire working life in local government. Local government morale is at an all-time low due to funding cuts and the 'postcode lottery' of support, with councils across the north suffering disproportionately. The Government's approach towards tax and spending is unjustified; shifting the burden from progressive taxation to regressive council tax impacts areas of high deprivation most severely. Social care services are being inadequately funded through council tax hikes that let the wealthiest off the hook while forcing poorer communities to shoulder greater burdens.
As a former councillor in Wolverhampton, I thank City of Wolverhampton Council for its work during the pandemic and welcome the holiday food and activities programme. The Government has provided significant funding to local government, including £148 million for Wolverhampton city council to support businesses and vulnerable residents. Next year's funding will rise by 4.6%. While political football around council tax may continue, I urge more people to hold their councils accountable and participate in decisions that shape council spending.
I praise Blackpool and Wyre Councils for their efforts on behalf of local constituents. Labour's poor quality contributions to debates are disappointing; it is ironic for Labour to lecture about council tax given its record under the last Labour Government when council tax doubled. The proposed increase in council tax by up to 3% for social care is necessary due to increasing demand for services, with a referendum block on rises above 5%. Labour's progressive property tax proposal lacks local flexibility and overlooks extra covid funding provided to local councils.
Gagan Mohindra
Con
South West Hertfordshire
Mohindra draws attention to his financial interests and discusses local government responsibilities. He praises council officers for their hard work during the pandemic and supports a safety net approach, including the £500 million council tax hardship fund.
Maria Eagle
Lab
Liverpool Garston
Eagle argues against increasing council taxes during a recession, citing significant budget cuts faced by Liverpool and Knowsley councils. She highlights how low-income households are disproportionately affected and calls for a fairer funding solution.
Elphicke speaks about the financial support provided to Dover District Council and Kent County Council during the pandemic, including £100 million in additional funding. She also discusses the impact of illegal migration on local finances.
Andrew Gwynne
Ind
Gorton and Denton
Gwynne criticises the regressive nature of council tax and highlights the financial challenges faced by councils like Tameside and Stockport due to significant funding cuts. He expresses disappointment with the Government's failure to fully reimburse cash-strapped councils during the pandemic.
Jamie Wallis
Con
Bridgend
Welsh Labour has presided over more than two decades of council tax rises, with further increases planned this year. Council tax in Wales has risen 30% faster compared to England, trebling from £495 in 1998 to £1,667 by the end of 2021. Bridgend residents have seen consecutive yearly increases, with an average home paying about £320 more than five years ago. Council tax rises hit working families hard during a difficult year and treat people like cash cows while services are cut. The UK Government supported councils in England during the pandemic but Welsh Labour should match this ambition by supporting councils to keep bills low, allowing residents to veto high rises, as is allowed under the Localism Act 2011.
Mike Hill
Lab
Hartlepool
Austerity measures over the last decade have led to public sector cuts in local authorities causing major job losses and service reductions. Hartlepool's council tax is one of the highest due to high levels of deprivation, growing costs, and limited funding from Whitehall. Departments like children’s and adults’ services are stretched beyond capacity despite best efforts by council staff. The Chancellor promised no new taxes this year but instead is trying to introduce them through local councils. Increases in council tax will hit those in precarious financial situations such as young families, low-income households, workers, and self-employed individuals.
Robert Largan
Con
High Peak
Councils have been under incredible pressure throughout the pandemic with over £10 billion provided by the Government to support them. No council is forced by the Government to increase council tax, and this debate should be about how to reshape the tax system after covid. The report “Levelling up the tax system” highlights that average council tax per head in London is much lower than in more deprived regions like the east of England or south-west, despite generating a significant amount of tax revenue. There is an opportunity for the Government to think about making the tax system fairer and to require regional impact assessments as standard practice during Budget processes.
Jeff Smith
Lab
Manchester Withington
The Secretary of State's speech was disingenuous, knowing that Labour councils have been forced to raise council tax due to 10 years of disproportionate cuts by Tory-led Governments. In Manchester, the council sold part of its share in the airport to guarantee an annual dividend to help make up income shortfalls caused by Government funding cuts. However, the pandemic has resulted in £71 million-worth of impact on this revenue. With only £108 million of Government funding available for a £152 million shortfall, Manchester faces £44 million of cuts even with the maximum permitted council tax rise. The Government must fund councils properly to avoid such rises and provide long-term planning ability for social care, which is set to increase due to an ageing population.
Matt Vickers
Con
Stockton West
Mr. Vickers praised the Government for providing £10 billion to local councils, highlighting that his council received an additional £110 million. However, he criticised Stockton Council for not shielding residents from unnecessary increases in council tax and pointed out that under Labour-led councils, council taxes have significantly increased compared to Conservative councils. He also mentioned several instances of wasteful spending by the council.
Tim Farron
Lib Dem
Westmorland and Lonsdale
Mr. Farron opposed the increase in council tax, arguing that it disproportionately affects those who are struggling financially during a pandemic. He suggested increasing taxes on second home owners to recycle money back into local communities, addressing issues like reduced demand for public services due to high numbers of empty properties.
Ms. Brown highlighted the severe impact of the pandemic in Newham, with high levels of child poverty and homelessness, as well as record furlough numbers. She called on the Government to compensate the council fully for lost revenue and additional costs due to covid-19, stressing that an increase in council tax would be extremely difficult for her constituents to afford.
Mr. Baynes criticised the Welsh Labour Government's funding settlement, which he argued discriminated against councils in north and mid-Wales by providing lower increases compared to south Wales. He pointed out that Wrexham County Borough Council was forced to increase council tax significantly due to financial pressures, despite receiving additional funds from UK Government.
Claire Coutinho
Con
East Surrey
The Conservative Government has provided unprecedented support to councils during the pandemic, including an extra £10 billion. Council tax rises in Conservative-run areas like Surrey are moderate compared to Labour-led areas such as Croydon and London. The council tax hardship fund provides financial assistance for struggling families.
Lilian Greenwood
Lab
Nottingham South
The 5% hike in council tax is not fair on constituents already facing an economic crisis due to the pandemic and government's failure to control it. Nottingham City Council faces a £28.4 million unreimbursed cost for coronavirus-related expenses, despite promises of support from the Government.
Critiques Labour's record on council tax increases in London and elsewhere, highlighting higher taxes imposed by Labour-led councils compared to Conservative ones. The speaker argues that Conservative-run councils offer better services at lower cost, contrasting with the high tax and wasteful spending policies of opposition parties.
Gary Sambrook
Con
West Bromwich West
In Birmingham, the Labour-led city council faces numerous examples of waste and incompetence. The Perry Barr bus depot move has seen costs skyrocket from £2 million to £16 million due to incompetent management. The council also failed to provide timely business grants as promised by the Government during the pandemic. Additionally, there are issues with the Bristol Road South bus lane installation and home-to-school transport service inefficiencies.
Erith and Thamesmead
My constituents will face a significant council tax increase while services continue to be cut. The Government's promise of 'whatever it takes' for councils has been broken, leading to redundancies and increased fees and charges. Proper and sustainable funding is needed for social care, which should not vary based on postcode lottery. An enforced council tax rise during the pandemic will cause further hardship.
Peter Gibson
Con
Darlington
Since 2019, Conservative-led Darlington Borough Council has achieved significant improvements despite past Labour management that raised taxes and reduced services. The current team has saved key facilities, tackled fly-tipping, secured funding for local projects, and efficiently distributed support grants to businesses during the pandemic. While Labour attempts to create headlines with divisive politics, the Government's support for local authorities is commendable.
Chris Clarkson
Con
Eccles
Financial mismanagement by Labour authorities, including excessive council tax rises and vanity projects. Criticised Andy Burnham's budget increase for Greater Manchester.
Emma Hardy
Lab
Kingston upon Hull West and Haltemprice
Called out the impact of austerity on Hull and the unfairness of an £88 council tax rise and a £20 cut in universal credit. Emphasised the need for investment in green energy projects to aid recovery.
Catherine West
Lab
Hornsey and Friern Barnet
Highlighted broken promises on social care and local government funding. Criticised the wasteful spending on consultants instead of local authorities during the pandemic and called for a rethink on council tax rises.
Attacked Labour's mismanagement in local councils, citing examples like Wakefield Council overspending and poor service delivery. Criticised demand for more funding without improving systems or efficiency.
Kate Osborne
Lab
Jarrow and Gateshead East
The Government promised to do whatever was necessary to support councils during the pandemic. However, they are now planning to force a rise in council tax, breaking their promise and putting further financial pressure on hard-working people. With austerity measures leading to significant funding cuts, adult social care has been particularly affected by the lack of government funding, placing an additional burden on local councils.
Councils make their own decisions on council tax rises and Labour's criticism is misplaced. The Conservatives introduced a cap on rises in 2011 which Labour opposed in the LGA. Despite the pandemic, Conservative-run councils have been able to manage effectively and provide essential services while maintaining balanced budgets. In contrast, Nottingham City Council under Labour administration has faced financial difficulties due to poor management and ideological spending.
Newcastle upon Tyne North
Even before the pandemic, millions were struggling with council tax payments. The financial pressures have been exacerbated by significant cuts in central government funding since 2010 and a failure to address the crisis in adult social care. This has forced councils to increase both council tax and social precepts annually to fund essential services. The shift towards more aggressive local government financing methods has squeezed struggling families, making it harder for communities to bear.
Council tax debates should provide facts rather than spurious political rhetoric that undermines those economically vulnerable due to the pandemic. It is a time for truth and certainty, not divisive politics. The reality is that under Conservative leadership, council tax in England has been lower in real terms; local authorities have discretion over rises and can defer them for a year if necessary. Many Labour-run councils are planning to increase council tax as well.
Matt Western
Lab
Warwick and Leamington
This Government, like their predecessor and their predecessor, are pursuing a policy that promotes an ever-widening gap between the haves and have-nots. The opening remarks of the Secretary of State suggest he is clueless about how hard this is hurting hard-pressed households across the country. Most shameful of all is the Government’s disingenuous claim to level up our country and our society. This is laid bare in their approach to local government finance, where they have brazenly encouraged this widening of wealth between our local authorities—between shire and city, and north and south. Instead, they have presided over an acceleration of inequality across this country, while families have to stump up more money for less locally. Residents in Warwick and Leamington are facing a further increase of £94 on average this coming financial year, despite next to no increase in wages and inflation at between 0.5% to 0.7%. Warwickshire County Council has lost half a billion in funding since 2013. Among all the services it has cut or closed, let me just mention the virtual closure of youth services, which has clearly contributed to knife crime rocketing. We now have the prospect of yet another rise in the police levy from the police and crime commissioner. It is another 6%—12 times the inflation rate—on local taxes, while cutting 87 staff from the investigations and domestic abuse teams.
This Government are supporting councils with £10 billion of support, including more than £2 million to Gedling Borough Council here in Nottinghamshire, plus more to help ease financial burdens. Our councils have been on the frontline when it comes to delivering services during this pandemic and they deserve credit for their efforts. Conservative-led Nottinghamshire has been described by an LGA peer review as 'an effective council delivering good quality citizen-focused services'. The report stated: 'There is financial stability in the organisation and the Council has a proven track record of delivering savings while maintaining front-line services over a long period of time—this is impressive.' In contrast, Labour-run Nottingham City Council faces challenges such as selling off assets to balance budgets and dealing with issues like the failed Robin Hood Energy scheme.
Zarah Sultana
Lab
Coventry South
The pandemic has exposed deep inequalities: the 10 richest individuals in the world have seen their wealth rise by more than £400 billion, while millions of jobs are lost and families rely on universal credit. The Government’s plans to raise council tax to plug a £15 billion cut from central government funding over the last decade can mean an average rise of nearly £100 for band D households. This breaks their promise to 'do whatever is necessary to support councils'. They also plan to cut workers’ rights and universal credit, exacerbating existing inequalities. Before the pandemic, Britain was rigged in favour of the rich, leading to a higher risk of death from covid among poorer communities and BAME groups. Instead of increasing council tax or freezing pay for key workers, we should focus on cracking down on £90 billion dodged in taxes annually, making super-rich individuals and big businesses pay their fair share.
I support low taxes and good value for money. Cornwall Council under a Conservative administration froze council tax for several years but now faces rises and wasteful spending. I propose applying council tax to all properties built for residential purposes to ensure fair funding of local public services, especially in tourist areas like Cornwall and the Isles of Scilly where there is a shortage of housing.
Kevan Jones
Lab
Durham North
Most council tax payers think that their council tax pays for all council services, but the reality is it consists of council tax, central Government grant and business rates. The central Government grant has been cut by 56% in the last decade, hitting northern councils harder due to reliance on this grant. In County Durham, a 40% budget cut amounts to £232 million less from central funding. Councils are making efficiencies but cutting 40% of their budgets is unrealistic without service cuts. Social care and looked-after children services consume 60% of Durham County Council’s budget, rendering efficiency claims irrelevant. The Government's push for local council tax increases penalises the north more than the south. This regressive measure hits hard-working families in regions like North Durham.
James Daly
Con
Bury North
As a councillor for nine years, he criticises Labour-controlled councils for consistently increasing council tax year after year. He argues that the north has suffered from decades of incompetence by Labour councillors leading to higher taxes. Daly notes an unprecedented level of support from this Government with £107 million extra spending on Bury Council and further business support during the pandemic. He calls for accountability in local authorities and criticises Labour for using general slogans without concrete proposals impacting constituents.
Ruth Cadbury
Lab
Brentford and Isleworth
Cadbury discusses the practical challenges councils face with forced council tax increases while making cuts. She notes a roughly 80% reduction in central Government grant funding over ten years, which once made up half of Hounslow’s income. Additional costs from covid-19 response have exacerbated financial strain; Hounslow councillors are having to consider further cutting social care provision and back-office roles due to £6 million savings this year and £12 million next year. The council has also funded a community hub and recovery plan, but she argues for the Government's partnership in supporting these costs.
Kate Hollern
Lab
Croydon Central
Tributes contributions made during the debate, criticises the Government's broken promises and inadequate support for councils during the pandemic, argues that a council tax hike is regressive and will exacerbate regional inequality.
Luke Hall
Con
Wellingborough
Praises local councils' efforts in responding to the pandemic, disputes Opposition claims about inadequate Government support for councils, highlights the substantial financial aid provided by the Government to address pandemic-related costs and maintain services.
Government Response
Defends the Government's stance on council tax hikes, emphasising adequate funding provided to local councils during the pandemic. Highlights that many Labour-run councils have not responded to consultations despite their vocal opposition.
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