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Town halls across London are in a race to freeze or cut council tax bills next year.
Millions of Londoners stand to benefit as Labour, Conservative and Lib-Dem authorities compete to keep demands down in the run-up to the general election. Labour stole a march by announcing that its eight councils in the capital would impose a freeze.
But Tory-controlled Hammersmith and Fulham upped the stakes today by promising to reduce bills by three per cent in April, for the fourth year running.
“There is no doubt that London councils are locked in a race to bring down council tax,” said Tony Travers, a local government expert at the London School of Economics.
“There's a fair chance that the majority of councils will cut or freeze. This is unprecedented, nothing like this has every happened before during the life of the council tax.”
More than half of the 33 London councils are now on course to avoid an increase in bills, say experts. The tax may also be frozen in boroughs where local elections will be held.
Labour-run Lambeth, Lewisham, Tower Hamlets, Hackney, Newham, Barking and Dagenham, Greenwich and Haringey will see an absolute freeze in the council tax for 2010-11. Hackney is due to become the first authority to freeze the levy for the fifth year running.
Tory-run Westminster, Wandsworth and Kensington & Chelsea are expected to cut or freeze their council tax demands while Barnet is adopting a no-frills approach, with local residents being asked to pay more for faster or better services in some areas.
Liberal Democrat insiders say the party's councils in Islington, Brent and Southwark were likely to have no rises.
Boris Johnson has also promised not to increase the Greater London Authority element of the council tax. Hammersmith and Fulham is seen by many MPs as a model which David Cameron will use to reduce the costs of central government. “We have saved £42 million by cutting waste and bureaucracy,” said its leader Stephen Greenhalgh.
But Tory critics say council tax is being kept down or lowered by introducing new charges, privatising services and cutting jobs.
Stephen Cowan, leader of the Labour group on Hammersmith and Fulham, accused the Conservatives of imposing more than 500 “new or increased stealth taxes” in three years.
Reader views (19)
Mario, re: your question about business rates - the rates are controlled by central, not local govt.
- Caller, Hungerford, UK, 02/11/2009 22:21
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Whoa guys, lets get this right. Local Authority employees do pay into their own pensions. Like many employees, its taken at source from gross pay before you recieve the net pay, just the same as tax and NI contributions are.
I work for a local authority and a big chunk of my salary goes towards the pension that I pay into and have done for my entire career.
- Caller, Hungerford, UK, 02/11/2009 22:18
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the 40% of people getting help with council tax should give up some of their time for the community as others are working to pay for them
- Outspoken, Richmond, 02/11/2009 14:49
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Agree with John and David. Richmond Borough's Lib Dems are fiscally inept.
I would suggest that if Cameron is serious about devolving power to Local Councils then he should also devolve responsibility and retention of business rates. This should concentrate councillors minds to reviving sucessful town centres instead of turning empty commercial premesis into flats.
- Nemesis, Twickenham, 02/11/2009 14:44
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All council tax should be reduced to the levels they were before Labour took control. As others have said local authority employers can pay in to their own pensions and not have them paid for by the public. Freezes and reductions in council tax always occur when it is an election year.. it's just a slight of hand and will either go up after the election or esential services (but not dustbin snoopers!)will be cut to make up the shortfall.
- Strongbow Sullivan, Paris,France., 02/11/2009 14:41
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Council tax freeze for Londoners. Another election gimmick by the Tories to secure the London vote and the bills will go up again if and after they are elected. They started the whole thing, remember !
- Thomas Hayes, Leeds UK, 02/11/2009 14:18
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Hurrah for my local Liberal run council then, another year of above inflation increases, I guess they think why bother when you know you'll never get into power.
- Bob, Cheam, 02/11/2009 13:58
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So thats the employment that Mr Boyle achieved on leaving the BBC, all makes sense now.
- Bill, Hay~Heath UK, 02/11/2009 13:18
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Funny that the business rates went up in April by 5.8% and is predicted to go up next April by 15/18%.
Why not cut or freeze the business rates?
- Mario Kempe, london, 02/11/2009 12:54
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I suspect Cowley Street is applying much pressure on the administrations of Richmond and Kington as it looks a fair bet that Vince Cable will be the only Lib Dem MP left in the area after the next election.
But why should anyone be surprised ? After the LibDems regained Richmond following concerted attacks on the previous administration for "building up reserves rather than cut council tax bills", council tax in the borough has increased in successive years since 2006.
- John, Twickenham, 02/11/2009 12:45
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The retail price index at end September 2009 was 198.3 so that (subject to any government uplift) a 1.8% increase (£1.71) will be payable on the basic state pension of £95.25/week in April 2010. Yet the changes in local authority costs are likely to be much higher than this and la's are suffering a loss of income as a result of the recession, And the 3-year local authority settlement for 2008-2011 from HM Government imposed some expected efficiency savings. An incoming council after the May 2010 elections will be subject to the existing 5% increase cap on council tax increases. Freeze or reduction,,,how do they do it - is it wise?
- Donald Smith, London, 02/11/2009 12:38
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Agree with P Staker, I work in the private sector and cannot afford a private pension after taking a 20% pay cut. Why can't these people pay their own way like the rest of us.
- David, London, 02/11/2009 12:05
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No doubt Richmond council with the huge expenses they pay themselves will not see any reduction.They are trying to kick out the poorer members of society.They must be one of the most expensive councils in London.
- David, london, 02/11/2009 11:56
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Seeing as a large proportion of 'Londoners' are living on benefits it will make little difference.
- Steve, London, 02/11/2009 11:20
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Still not good enough, about 25% of council tax goes straight in the pension coffers.
Why should council tax payers keep putting into public sector pension funds, when they can't afford a private pension.
- P Staker, London, 02/11/2009 11:17
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The price freezes have been obtained by raising prices for the old and vulnerable by increasing fees for meals on wheels and daily care costs. We are heading back to a Dickensian society.
- Paul B, London, 02/11/2009 10:56
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Nothing like bribing us with OUR money.
- Chris, Rochester, 02/11/2009 10:44
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Who on earth is fooled by this ?
We'll just land up with a 25-35% increase over the following years but of course by then the politicians will all have cosy little jobs for 4-10 years.
Robbing Peter to pay Paul springs to mind!
- Hansel, London, 02/11/2009 09:33
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Labour-controlled Lambeth have nothing to be proud of. They raised council rents by 17% percent this year (since reduced by a tiny amount) to cover a 9 million pound shortfall in their housing budget. Hard working council tenants who pay their own rent are being forced to subsidise the council's incompetence.
No rise in council tax is the very least they could do.
- Sarahn, London, UK, 02/11/2009 09:27
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