Angela Rayner speaks to Wes Streeting at the International Investment Summit (Image: Getty)
Angela Rayner has refused to rule out Labour imposing unlimited council tax rises just months after claiming the party had no plans to hike the levy.
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As it stands, councils can't increase the rate by more than 5 percent, without voters supporting the move in a local referendum.
That said, even if council tax bills were raised by 5 percent, in cash terms, that would mean a ￡100 rise in April - far above current inflation.
On Friday, the Opposition accused Labour of plotting another "stealth tax" after the Deputy Prime Minister and Ministry of Housing and Local Government declined to discount getting rid of the referendum limit.
It has led to concerns that April may see council bills skyrocket if she announces the move in December.
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Angela Rayner and Rachel Reeves during the Labour manifesto launch. (Image: Getty)
The Local Government Association (LGA) wants ministers to axe the 5 percent cap and allow unlimited council tax hikes. This is the case in Wales, which is Labour-run, and council taxes have ticked up far faster than in England.
The LGA claimed England’s councils were confronting a ￡2.3 billion funding blackhole next year, which would rise to ￡3.9 billion in 2026.
They added that one in four councils would require an emergency bailout in 2025 to ward off bankruptcy.
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Greater Manchester’s Labour mayor and one-time leadership candidate, Andy Burnham, said jacking up council tax would be “highly regressive”.
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The Aintree-born Manchester mayor wants to see council tax replaced by a land tax. Under his system, people would pay an annual charge based on a percentage of the value of the property they own.
“I can’t see how you can solve the crisis in council finance without reforming council tax,” he said.
“We need a fairer system. Making council tax bear even more weight in its current form is highly regressive. I understand council tax unfairness more acutely now, and it can’t be defended.”
A decision on the referendum is due by the end of 2024; however, Chancellors have included it in their budgets before. Rachel Reeves delivered her first budget on Wednesday.
A government spokesman said: “We do not comment on speculation around tax changes outside of fiscal events, and we have been clear that any future decisions on council tax will be taken at the spending review and local government finance settlement.”