George Osborne extends council tax freeze


George Osborne: "This government is absolutely committed to helping people through these times"

Money to extend a council tax freeze in England to 2012-13 has been unveiled by Chancellor George Osborne.

The government cannot force councils to freeze bills but it is offering to give those that limit spending rises to 2.5% the money they need.

Money would also be offered to the Scottish and Welsh administrations, which will choose how it is spent.

The £805m move will be funded by efficiency savings but Labour said it would save people just £72 a year.

A similar pledge was included in the coalition agreement and resulted in all local authorities in England freezing or reducing their council tax bills in 2011-12.

'Not awash with money'

Mr Osborne, who is making his big speech to the Conservative Party conference in Manchester at about midday, had promised to freeze council tax for two years when the party was in opposition.

He told BBC Radio 4's Today programme the government was showing it could help families "where we can" in difficult times, despite the government not being "awash with money" as it tackles the budget deficit.

Start Quote

We are doing what we can to support jobs, support enterprise, support infrastructure”

End Quote George Osborne

He said, halfway through the financial year, it was apparent Whitehall departments were going to spend "a little way short" of the £350bn expected.

"This is often the case but sometimes government has just sat on that money because it hasn't mattered so much. I think at times like this if we've got anything spare, we should spend it."

Scotland will get an extra £67.5m in its block grant but ministers are still deciding how to spend it. The SNP has already pledged to freeze council tax for five years.

The chancellor is under pressure to spell out detailed plans to get the UK economy growing again amid mounting criticism from Labour and senior figures in his own party.

He told the BBC he would also be announcing "major investment in cutting-edge science", involving the material graphene in high performance computing, as well as a programme to extend mobile phone coverage to six million people and transport infrastructure investments.

'Can-do attitude'

The government had "activist" policies on dealing with the deficit, keeping interest rates low and cutting corporate taxes and more investment in apprenticeships, he said.


As George Osborne put it, the government is not exactly awash with money at the moment so how has it found £800m to freeze council tax plus £200m to invest in science?

The chancellor has told us he's using the "underspend" from government departments which have been "eliminating waste and inefficiency".

The explanation is that half way through the financial year the Treasury has been able to assess whether Whitehall departments are on course to spend the total of £350bn allocated for this year.

It is not unusual for some to spend less than expected and this time the chancellor will seize the money to ease household bills.

The key point from the Treasury's point of view is that this does not change the overall spending plans or the deficit reduction strategy.

He cited the increase in time an employee has to work before they can claim unfair dismissal as an example of how the government will lift the burden on business.

But in his BBC interview he reiterated that his "substantial strategy to deal with Britain's debts in a global debt storm" was essential to keep interest rates down.

Mr Osborne, who will leave the conference early to attend a meeting of European finance ministers in Luxembourg, also said a resolution to the eurozone crisis "would do more to boost the UK economy than anything else in the world at the moment".

With business groups calling for further help, Mr Osborne said his corporation tax cut from 28% to 23% - announced in March's Budget - was a "real sign of our commitment to getting business growing."

The Institute of Directors has called for corporation tax to be cut to 15%.

And on Saturday senior Conservative backbencher Andrew Tyrie said the government was not doing enough to promote economic growth.

The bulk of Mr Osborne's plans will not be announced until November in the second phase of the government's growth review.

For Labour, shadow Treasury minister Chris Leslie said: "Out-of-touch ministers don't seem to understand that people are struggling with rising prices and energy bills now, but this policy means no help for another six months.

"It would mean just £72 for a typical household, which is a fraction of the extra £450 a year the Tory VAT rise alone is costing a couple with children."

And Dave Prentis, head of the union Unison, accused the Conservatives of "playing to the gallery".

"They have found millions by making public sector workers tighten their belts. Workers who have had their pay frozen for two years and are being forced to pay more for a smaller pension. These workers are council taxpayers too."



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  • rate this

    Comment number 108.

    Simple vote buying with MY money.

  • rate this

    Comment number 107.

    Under Labour my council tax went from £700 to £1900 in under 10 years. Personally I think this tax should be reduced by removing any public sector pension contribution. Force them to take out a private one, just like the private sector who fund their salaries.

  • Comment number 106.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 105.

    Osborne said he would freeze council tax when he was in opposition.
    He made it so last year and is doing so again next year.

  • rate this

    Comment number 104.

    The disgusting greed of many commenters here and the protest marchers so completely reflects labour's legacy of 'something for nothng', 'everything is my RIGHT', 'to hell with honesty and honour' 'to hell with the Country and its people' as long as YOU get what you want. There are NO custs - only a refusal to spend phoney money that never existed outside of labour's lies.

  • rate this

    Comment number 103.

    They do not seem to have any idea on how to grow the economy firatly one has to have job security secondly you have to have money to spend banks do not have enough and thirdly items should be cheap compared to wages Vat Increase unemployment law and bank regulations are all regulations against the economy growth

  • rate this

    Comment number 102.

    What a difference from Labour.

    Under Labour it was year after year of increases.

    Tax tax tax, spend spend spend.

    Labour thought money grew on trees.

  • rate this

    Comment number 101.

    Whilst this is clearly a short term measure, then something still needs to be done to limit council tax increases in the future. If pension and some other income increases are to be limited to CPI then council tax increases should also be capped in the same way. Otherwise council tax would rise faster than other outgoings and take a disproportionate part of the income of fixed income people.

  • rate this

    Comment number 100.

    All this will mean is less actual services from private contractors - actual core jobs - and pensions- will be maintained. We need a big look at what councils actually do - particularly in Labour held areas - and the complete cancellation of this inefficient tax - poll tax would have been much fairer.

  • rate this

    Comment number 99.

    This really does take the cake - Obviously a conference sweetener to create a good impression - There are far more attractive sweetener opportunities - Jobs - Higher import tax to stop rubbish being imported -Job creation rewards - Energy costs frozen etc.

    The basic flaw in all of this is that we are still giving a greater proportion of our wealth to others - rather than care for our own


  • rate this

    Comment number 98.

    Since the ConLibs came to power how much has been spent on bombs and bullets, think tanks, ministerial away-days, un-necessary foreign trips etc etc.

    On the other hand how many have lost their jobs, their homes, their lives even as a direct result of these policies. Britain continues to be an expensive place for the rich to toy with and yet, 'we're all in this together'.

  • rate this

    Comment number 97.

    Darren Shepperd
    2 Minutes ago 93.chrisk50

    Darren the only services fully funded by income tax is military, the reason it was introduced - to fight wars.

    Collectively, fire services spent around £2.1 billion of public money in 2007/08. Their income comes from a mix of council tax and grants from government

  • rate this

    Comment number 96.

    you need to check your facts because fire and ambulance clearly are not paid for from council tax.
    The fact remains no matter what over the last ten years council taxes have risen at well above inflation yet councils always cut services.
    Where is all the money going into savings accounts in places like Iceland while councils claim they have no money.

  • rate this

    Comment number 95.

    I don't know if there is a limit on how much the council tax can rise in any year; if there is, a freeze might not be that helpful anyway. It is the rocketing cost in fuel with another bitterly cold winter forecast that the government should be looking at.

  • rate this

    Comment number 94.

    @15. geekonthepc

    You get what you're given. That's the price of democracy. Just when you're ready to to hold someone responsible for it, they've done a runner. I hope you like it. It's the system of unaccountability.

  • rate this

    Comment number 93.

    At least we can see what we get for our council tax. All the services, schools & teachers, police, fire & ambulance, street cleaning, bin men etc.

    What do you get for your income tax - military, wars we don't want, unemployment and all other benefits that should be reduced by providing more employment.

    NI pays for NHS & pensions - if it's not enough increase this.

  • rate this

    Comment number 92.

    Yesterday, abolish ECHR, today, freeze Council Tax, can't wait for tomorrows soundbite.

  • rate this

    Comment number 91.

    wow freezing a tax that is already way too high in return for what you get we have had rises in council tax well above inflation every year since they have been introduced and yet the councils give ever less for the increasing taxes
    and for people on the minimum wage £887 p/m by the time they pay the absurdly high rent and council tax they have nothing left and tories think thats too much

  • rate this

    Comment number 90.

    Instead of pandering to the resentment some seem to have that "their money" is being used to help people less fortunate than themselves, or provide council services, we should simply make sure that the consequences on the poor are reflected back, by law, first onto the politicians and then onto their big business friends who make those decisions and who hold the most money in salaries and bonuses.

  • rate this

    Comment number 89.

    Another con-trick by a chancellor with no idea. Thus far he has cut the increase in benfits and pensions and increased tax on pensions. He has cut the winter cuel payments by £50. Well, I am paying for it partly by reducing my food bill and partly by abandoning a hobby I started in the 1950's. In fact I am digging out the ideas I had then to keep warm in the cold!


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