Rachel Reeves' Spending Review suggests that families are in line for a council tax increase (Image: Getty)
Rachel Reeves has sparked fury after announcing a more than ￡300 council tax hike. The Chancellor's Spending Review unveiled yesterday suggested that the average home's bill will rise by ￡359 by 2029, as ministers reportedly calculate that councils will increase the rate by 5% annually over the next three years. A hike higher than this means a local referendum is usually triggered, but ministers can authorise the measure in specific circumstances.
The Chancellor, when asked whether the spending review depended on council tax increases, and whether people should expect rises throughout the Parliament, told ITV: “The previous government increased council tax by 5% a year, and we have stuck to that. We won’t be going above that. That is the council tax policy that we inherited from the previous government, and that we will be continuing." She added: "And of course, that money goes into those local public services, including social care, and in case of the police precept, it goes into our local policing.”
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Brits look to be in for higher council tax bills (Image: Getty)
"Rachel Reeves claimed council tax wouldn't have to go up to afford her spending spree, but this tax bombshell shows that you can't trust a word she says," Kevin Hollinrake, Tory communities spokesman, told the MailOnline.
"Because of Labour's profligate spending plans today, tax and borrowing increases in the autumn are now inevitable.
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"This tax double-whammy is just rubbing salt in the wounds, and means hundreds of pounds less in take-home pay for hard-working people."
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Critics have suggested that Ms Reeves “failed” to back English councils in the spending review, including authorities which are effectively bankrupt.
Woking Liberal Democrat MP Will Forster called on the Chancellor to “justify” a “lack of investment” into local government, and Tory Lewis Cocking said Labour’s spending plans were “devastating” for the sector.
The Treasury will pump an additional ￡3.4billion per year into councils by 2028/29, compared with 2024/25, which combined with yearly council tax rises is set to boost their spending power by 3.1% in real terms.
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But Mr Forster warned that “in the detail of the statement”, the Government “is only investing an extra 1.1% in local government next year and the year after”.
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He told the Commons he was “very disappointed” with the Chancellor’s statement and asked: “What does the Chancellor say to councils across the country and to my constituents of Woking to justify that lack of investment?”
The Chancellor replied: “Well, that’s real-terms increases in spending every year, that this Labour Government are giving to local authorities.
“And that compares to the Conservative-Liberal Democrat administration from 2010 to 2015 that cut real spending by 2.9% every year, so I’m much happier to stand on my record as Chancellor than what the Liberal Democrats did when they had a chance of being in government.”