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 348.

    I just love Labour's language.

    "Just 72 pound a year for an average family".

    Their complacency with other people's money doesn't change.

    All the money poured into the public sector just enriched consultants and the take home pay of public workers, actual benefits for taxpayers were minimal.

  • rate this

    Comment number 347.

    Duncan-Smith linking benefits for asylum-seekers to the riots in Manchester?

  • rate this

    Comment number 346.


    You used only the word wealth. The top 100 wealthiest in this country are worth far more than £62m. If you mean liquid assets, ie cash, shares, pensions etc, then I think you are still so very wrong. Are you trying to suggest that the top 100 have an average of just £620,000 each?

  • rate this

    Comment number 345.

    Wait a moment, didn't this lot want 'localism' to be the way? So why they now telling coucils what they can and cant charge? This lot are vey handy at telling councils what they can and cant charge.. but have little to offer in the way of suggestions when the cuts in the services are required to make what are, in reality, politicallty motivated savings of only a few pounds a year per person

  • rate this

    Comment number 344.

    Chris Leslie

    Shadow Treasury minister

    'extra £450 a year the Tory VAT rise alone is costing a couple with children'

    How on earth did he calculate that? Sounds like the most made up statistic i have ever heard. What did he ask one family?

    What a useless retort from a shadow minister. Utter garbage

  • rate this

    Comment number 343.

    Pickles last week, Osborne this week.
    Makes good headlines for the Mail, Express and Sun though.
    I wonder if there will be an “SAS” speech this year?

  • rate this

    Comment number 342.

    335. bigjohnthered
    7 Minutes ago

    Trying to buy a majority?

    Make the taxpayer better off they are buying a majority.
    Take money from the taxpayer and they are hitting the poor.

    Seems that whatever the Government do they will be dammed but people with tunnel vision.

  • rate this

    Comment number 341.

    1 There is no freeze: "The government cannot force councils to freeze bills".

    The government should tell councils their cuts to services are justification enough for no increases in rates - full stop.

    Why not instead distribute the money directly to mortgage holders? Or is that too much absolute commitment to helping people through these times?

  • rate this

    Comment number 340.

    More Tory Centralised State Intervention and 'handcuffing' of Local Authorities./Local Democracy.

  • rate this

    Comment number 339.

    "Last week, Pickles with dustbins.
    This week, Osborne with council tax.
    Trying to buy a majority?"

    You mean, trying to ensure services and a little price control for the population? And this is a bad thing?

    Not sure I see your problem. People moan when they get things, people moan when someone else is getting things. Perhaps your attitude is the problem?

  • rate this

    Comment number 338.

    302. enatheta
    "More than 90% of Britain's wealth is owned by less than 10% of the people"

    Wikipedia is wrong then, it states -
    The net worth information is based on data from the HMRC for 2004–2005 -

    Percentile point
    Wealth to qualify
    Percentage of total wealth owned by people at and above this level
    53% of total UK wealth

  • rate this

    Comment number 337.

    334 by mass retention - i was talking about their 'liquid' assets

    to realise the figures you talk about they would have to sell business's to those who would probably break down said business operations and sell off the most lucrative

    you really need to study economics!

  • rate this

    Comment number 336.

    Our local Tory council has cut back on services, but not on senior manager numbers or salaries.

    Sack everyone on over, say, 60k, halve the number of posts available, and make them re-apply. If they're as good as they say they are, the private sector will be rushing to employ them, so they should be ok.

    That should help keep council tax down.

  • rate this

    Comment number 335.

    Last week, Pickles with dustbins.
    This week, Osborne with council tax.
    Trying to buy a majority?

  • rate this

    Comment number 334.

    if the top 100 richest people in the uk had their 'wealth' removed it would equate to about £1 PER PERSON"

    The net worth of the richest 100 in the UK is far in excess of £60million (or even £6 Billion if you were dividing by the world population). I'm sure the ST Rich last had people around number 800 with assets of £60million and the richest was well over £6B.

  • rate this

    Comment number 333.

    IIts like shopping at Asda. Come on saving £6 a month. WOW.
    How about reducing the fuel tax...

  • rate this

    Comment number 332.

    George plays his fiddle whilst the UK burns.If he really wants to help the country he and his govt should call a General Election.

    Sadly, calling another election will not make the £1trillion debt go away!

    As far as I know, there are no left wing £trillionaires on the Planet who wish to come along and donate to help out a nation which spent its way into debt!

  • rate this

    Comment number 331.

    Sounds like bribing councils to toe the line. But I suppose those who cut their teeth in the financial services sector know their own tricks best.

  • rate this

    Comment number 330.

    Baz Rutter
    "The outcome, like last year, will be cuts in service to the vulnerable, mentally ill and elderly"

    Yes Baz, cuts to the vulnerable made for the most politically cynical of reasons usually by Labour councils happy to throw money around on empire building.

  • Comment number 329.

    This comment was removed because the moderators found it broke the house rules. Explain.


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