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 468.


    You are wrong

    This government siezed power, not by the mandate of the electorate, just by the creaky old rules

    More accurate the unelected Tories, siezed power to carry out their policies by an in house rig up with the Lib Dems. Nothing to do with the electorate

    Even the Arch Bish of Canterbury has said that the Tories have no mandate for their policies, yet still they persist.

  • rate this

    Comment number 467.

    376. bigmouth strikes again

    The cut is designed to free up more money so that businesses can employ people.
    I'm sure the first thing the biggest corporations will do is hire more people. This wouid be fair were there a threshold to make it benefit SMEs, not global corporations, who will walk away with millions which will be recovered by the Treasury from your pocket.

  • rate this

    Comment number 466.


    I'll still be the same, and I'm not daft enough to claim something I'm not.

    You can't even get the right measure; talking about debt when no debt is being cut at all over this entire parliament.

    If you know what you're on about, then you're doing a good job of pretending otherwise. Don't lecture me on debt when the problem is the deficit, and expect to be taken seriously.

  • rate this

    Comment number 465.

    @453 And therein lies the problem faced by councils today:

    CEO on £100k+...check
    Breast feeding coordinator....check
    CEO advisor....check
    Advisors advisor....check
    Good hardworking folk....sorry, no cash left.

  • rate this

    Comment number 464.

    One question for Osborne - when are things going to start improving ?

  • rate this

    Comment number 463.

    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.

    Who's in Cuckooland?

    The fact is there is a mega debt left by Labour needs repaying. Whats your solution to help us non-millionaires?

  • rate this

    Comment number 462.

    rebekka riot must be a real sex kitten? or not as she seems to have lost all capabilities of humour or human relationships!

  • rate this

    Comment number 461.

    The government has already cut it's own contribution towards councils by around 20%

    What about us?? The taxpayers??

    We should have parity and council tax bills for everyone should go down by at least 20%

    We're being left to hold the Local Council baby here, and a very extravagant baby it is too
    The government knows Local Councils are an overpriced joke and is starting to cut the purse strings

  • rate this

    Comment number 460.

    Next time you receive a "Council Tax Demand", try writing back to them saying that you will pay them on the condition that they provide you with a Bill of Exchange and a copy of the signed two part agreement where you consented to being billed for their "services" - it doesn't exist. There is no law regarding council tax, only statutes and by definition a statute is a two way contract.

  • rate this

    Comment number 459.

    452.Chad Secksington
    2 Minutes ago

    Promising things then changing their mind? What like promising to oppose tuition free rises (Lib Dem) and not to reorganise the NHS (Conservative)?
    How come this is neg. rated? Must be bunches of lazy Tories watching their grinning buffoons on the telly whist voting down perfectly reasonable and truthful post, because they dont like the truth.

  • rate this

    Comment number 458.

    A good start, given the massive increases in council tax paid under labour without any noticeable improvement in services.

    However, the local councils will still play party politics and certainly won't be forced into being efficient, so unless the coalition are going to remove party politics from local councils then this is a meaningless gesture.

  • rate this

    Comment number 457.

    Calum McKay
    Oh come off it !!! Without England Scotland would sink without a trace.
    The recent Bank crisis would have been enough to bankrupted Scotland, but for English Support . Get that chip off your shoulder and get real. The UK is stronger together. Oh and by the way I'm a Scot too.

  • rate this

    Comment number 456.

    I see it took the Barnett Osborne less than 110 seconds into his speech to the Tory drones to blame the last government.

  • rate this

    Comment number 455.

    " Rebecca Riot
    When this unelected government tumbles, whatever will be next?"

    Perhaps you could explain in constitutional terms how this government can be described as "unelected".

  • rate this

    Comment number 454.

    When the government brought in Council tax they decided to meet most of the education costs from central government. Now central government controls education rather than local education authorities because they are paying. The government talks about giving local councils more power, but council tax freezes lower the proportion of local funding and will result in more centralized power. Buy it?

  • rate this

    Comment number 453.

    I used to work for the local town council in the early 70s. It was very efficient. There were a handful of full time workers, and a lot of seasonal workers, usually students. Roads were repaired, grass cut, snow cleared when needed. Of course we didn't have outreach workers, walk coordinators, equal opportunities officers, consultants, council papers, team building events,etc We just did our work!

  • rate this

    Comment number 452.


    ...Labour's tactics are simple. Promise things. Doesn't matter to them if the promise are realistic. ...


    Promising things then changing their mind? What like promising to oppose tuition free rises (Lib Dem) and not to reorganise the NHS (Conservative)?

  • rate this

    Comment number 451.

    Gambler - I'm more aware than you obviously think. Should I claim I'm also a title which just so happens to fit the argument, Tomorrows arguments on road tax I'll be a traffic policeman who will you be?

    I wrote a whole argument but with the character limit its pointless.

  • rate this

    Comment number 450.

    I notice someone mentioned about street lights. I moved to Maldon in Essex 4 years ago and all the street lights here are turned off at midnight. The councils here send out three lorries to each house every week to collect garden waste, refuse and recyclebles. Tory council of course. All the lorrys are hired and the staff, agency workers.

  • rate this

    Comment number 449.

    435.Rebecca Riot
    "Who or what will govern instead? Any suggestions??"

    I've got a suggestion; why don't you open a book on UK politics and educate yourself, instead of people having to correct you every day on HYS when you erroneously claim the government is unelected.


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