Keir Starmer hits UK households with council tax bombshell - 'Day of shame!'

Instead of freezing council tax increases the Labour leader has presided over an inflation-busting increase in another cost of living blow

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Labour stands accused of hammering households and piling costs onto town halls in a “day of shame” by presiding over a giant increase in council tax. The average Band D council tax bill for a home in England will jump by 5% – rising by £109 from £2,171 to £2,280.

There is anger at Labour for this latest cost of living blow. Sir Keir Starmer said in 2023 that if his party was in power he would have frozen council tax. Instead, council tax is now a fifth higher than in 2021-22 when the average bill was £1,898.

A Conservative spokesman said: “This is Starmer’s day of shame. It is clear that taxes are only going one way on his watch because of decisions he’s made.”

Bills for a Band D property range from £998 in Wandsworth, South London, to £2,671 in Rutland in the East Midlands. An analysis found average bills in Greater London are 18% less than in the North East.

Caroline Abrahams of Age UK warned that the “cost of living crisis is far from over”.

She said: “The expected rise in council tax from April will no doubt add to the financial woes many older people continue to face. We’re still hearing from thousands of older people struggling to afford the basics as everything keeps going up.”

Kevin Hollinrake, the Shadow Local Government Secretary, said Chancellor Rachel Reeves’s decision to hike up employers’ National Insurance contributions had forced up costs for councils, despite funding to offset the extra expense.

He said: “This Labour government is driving up costs for councils across the country with their jobs tax... We are the only ones standing up to a dreadful Labour government determined to crush businesses, raise your taxes and trash the economy.

“This has been engineered by Labour, who have left town halls left to foot the blame when record bills hit the doormat.”

Tory leader Kemi Badenoch, speaking at the launch of her party’s local elections campaign, pledged her party would deliver better value for money, saying: “[At] local level Conservative councils consistently deliver better services at a lower rate... If you vote for something else you will get something much worse.”

Elliot Keck of the Taxpayers’ Alliance said bill increases showed councils had failed in the “desperate need to drive up standards” and he attacked the “stagnant productivity” he says is “endemic”.

Claiming this is “forcing councils to reach deeper into the pockets of local taxpayers just to stand still,” he said: “Town halls across England need to spend the next financial year imposing rigorous key performance indicators and performance reviews for all staff to ensure there is no one failing to pull their weight.”

Maxwell Marlow of the Adam Smith Institute pushed for reform, saying: “The uptick in council tax is regrettable, and will squeeze household’s budgets even further. But it’s not a surprise they’re doing this.

“For decades, Whitehall has placed more and more responsibility on local authorities that should have been given to the significantly more efficient private sector. Local government finances need an urgent and systematic review.”

Barry Lewis, of the County Councils Network said people in large towns and cities often pay significantly lower tax.

He said: “This year, some of those urban councils are in a position to freeze council tax or scale back service reductions due to the government focusing funding on these places at the expense of county areas. Councils in county areas have lost more central government funding over the past two decades than other parts of the country, leaving them more reliant on council tax to fund vital services such as adult social care, pothole repairs, libraries, and special educational needs.”

The level of council varies greatly according to where people live and what type of council represents them. In London, the average bill Band D bill is £1,982 (+4.7%) compared with £2,289 in metropolitan council areas (+5.6%), £2,366 (+5.2%) in unitary areas and £2,344 (+4.8%) in shire areas.

Kate Ogden of the Institute for Fiscal Studies said next month’s 5% increase in bills is “around twice the level of inflation” – and more hard times may be on the way.

She said: “A difficult outlook for the public finances means the Chancellor may struggle to find much more cash for councils, making further above-inflation rises likely. Councils will need to find ways to tackle rising demands and costs for their services if they are to avoid making cuts to local public services over the next few years.”

A Government spokesperson said: “We are under no illusion about the scale of financial issues facing councils we inherited and our work is under way to fix the foundations and bring long-term stability to the sector. And while councils are ultimately responsible for setting their own council tax levels, we have been clear that they should put taxpayers first and carefully consider the impact of their decisions.

“That’s why we are maintaining a referendum threshold on council tax rises, so taxpayers can have the final say and be protected from excessive increases.”

Anyone can check their home’s council tax band by going online and entering their postcode. Council tax bands in England are based on what a property would have sold for back in 1991.

Band D is considered the standard measure. Other bands are set as a proportion of this band.

A Government source said: “We know that families are struggling with the cost of living and that is why the Government remains committed to keeping taxes on working people as low as possible by we’re working hand in hand with councils to reform the outdated funding system, fixing the foundations to deliver improved public services across the country.”

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