Questions over Tory tax plans

Millions of households could enjoy a two-year freeze on council tax bills if the Conservative party wins power at the next election, shadow chancellor George Osborne has announced.

Mr Osborne said the tax freeze would mean a saving of £70 in the first year for an average household in a Band D property and £140 in the second year.

In his keynote speech to the Conservative party conference in Birmingham, he told delegates that the proposals would be paid for from cuts to Whitehall consultancy fees and advertising budgets, as well as from savings by local authorities themselves.

If councils could keep their annual council tax rises to 2.5% or below, a Conservative government would provide the money to ensure that the rise was not passed on to council tax payers, he said.

The plans have been met with a mixed response from the LGA’s political groups. Cllr David Shakespeare, leader of the LGA Conservatives said the chance to save £210 over the two years would be welcomed by council tax payers during the current credit crunch.

“A Conservative government is offering an incentive to councils to make it easier for them to freeze or lower council tax levels without putting front line services at risk, and they’ve backed it up with the promise of real money,” he said.

However, Sir Jeremy Beecham, leader of the LGA Labour group, cast doubt over how the cuts would be funded.

He said: “Local councils must be able to help people struggling with housing, people caring for vulnerable relatives, or those looking to wipe-out gang violence. Slashing a billion pounds from council budgets will put vital programmes at risk at a time when our communities need councils to work on their side.

“Imposing this financial strait-jacket on local elected councillors will undo the fantastic improvement in services and efficiency made over the last decade.” Lib Dem shadow chancellor, Vince Cable, said Mr Osborne was “simply passing the buck to councils, expecting them to make arbitrary cuts”.