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.

ANALYSIS

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."

 

Comments

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  • rate this
    -3

    Comment number 368.

    How can GO committed to help the families on cost of living, if the utilities bill,fuel increase, elderly & disabled pay for their care home as the impact of the cuts? Interest low=saving's interest low, means pensioner get less money for their investment. Freeze is no good cut to 0 is better

  • rate this
    +3

    Comment number 367.

    341 POSshaughnessy say ' why not distribute the money directly to mortgage holders.'

    Why should public money be used to help me buy my house?

  • Comment number 366.

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

  • rate this
    +1

    Comment number 365.

    Yet more Tory destruction disguised as a gift to the people. Less services to the elderly, millions more from the public sector claiming unemployment.

    It's OK if you're a millionaire like most of the cabinet. Cloud cuckoo land.

  • rate this
    +2

    Comment number 364.

    It's not a freeze it'll mean a further 5% cut in the service your Council gives you - On top of the 26+% over 5 years the tories have already imposed. You'll be paying the same but get much much less, They should GET OUR MONEY BACK FROM THE BANKS and get the economy moving.

  • rate this
    +3

    Comment number 363.

    "the Tory VAT rise"

    Would that be exactly the same one that your mob were revealed as planning to bring in Mr Leslie?
    This numpty must think we were born yesterday.

  • rate this
    0

    Comment number 362.

    Locust.

    Thank you for your concern regarding both my health and education!

    A liquid asset is one which can be sold freely and quickly within market hours. It is further defined as an asset that will have a ready market of buyers. Shares and pensions have recognised market liquidity, as do futures, options and clearly even government debt.

    If you have any questions, please put up your hand

  • rate this
    +2

    Comment number 361.

    THE INLAND REVENUE SHOULD STOP TAXING THE STATE PENSION TOO

  • rate this
    0

    Comment number 360.

    I am pleased with this. Aside from my bins emptied bi-weekly and the normal road works etc - I do not use any services. It is about time I receive a bit of a break as well. (and no, I don't have children, don't use the bus service and do not receive ANY money from council or government).

  • rate this
    +2

    Comment number 359.

    The non-enforcable council tax freeze isn't worth discussing.

    The cut in corporation tax, however, is. Another 5% handout to the wealthy. I thought we were supposed to be "all in it together".

  • rate this
    +3

    Comment number 358.

    Comment number 315. milvusvestal
    27 Minutes ago

    The best option is to introduce a poll tax on everyone over 18 years of age, regardless of home ownership.

    Is you memory so poor that you cannot remember what happened last time that was tried. It was so grossly unfair that it as good as cost Margeret Thather here premiership.

  • rate this
    +6

    Comment number 357.

    “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”
    -------
    This is already happening,. A close friend has re-applied for her job 3 times. Unfortunately her main clients are drug addicts which the private sector will not touch with a barge pole.

  • rate this
    -1

    Comment number 356.

    350.UKStinks

    "They love privatisation so much maybe they need to take a leaf out of that for Tax"

    Everybody loves privatisation when it suits them; even the unions. They were shouting about how contracts should be given to private British firms since Bombardier recently lost to Siemens.

    Ed Balls talked about debt reduction using bank sale proceeds - surely that's a privatisation?

  • Comment number 355.

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

  • rate this
    +1

    Comment number 354.

    " locust
    you really need to study economics!"

    You need to study English, then. You used the word "wealth" which is their entire asset base, not just liquid assets. The top 100 people in the UK have far more than £62 million in liquid assets as that's less than £1m each.

  • rate this
    0

    Comment number 353.

    274. Lemog
    256.Andy_Pandy1968
    #
    ’as recently as 2008 spending was under control’
    ‘most labour debt was to bail out the banks’
    =
    What you say is just factually incorrect. You’re either misinformed or falsifying the truth for partisan politics.

    Spending was not in control in 2008, hence the £ went down, & the bank bail out is separate from the Govt spending deficit/debt!

  • Comment number 352.

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

  • rate this
    +4

    Comment number 351.

    348.Bradford
    Just now

    All the money poured into the public sector just enriched consultants ...
    =
    Priavte consultants, do you mean, when the coucils were made to contract services out?

    Thanks for clarifying that for us.

  • rate this
    0

    Comment number 350.

    When will the Tories ever get a grip on the real world!!!!!

    They love privatisation so much maybe they need to take a leaf out of that for Tax.

    Simple mathematics tells me that if you do not get a service you pay for then you refuse to pay. Like my council tax, the services are getting worse so next year i am going to pay 10% less! and they can take me to court for it.

  • rate this
    +3

    Comment number 349.

    too little, too late

 

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