Council tax bombshell hidden in budget will see households paying hundreds more

Taxpayers across the country are set be hit with another hike after the government gave councils permission to put rates up (Picture: AFP)

Jeremy Hunt has hidden a council tax bombshell in his austerity budget worth hundreds of pounds to average households.

The chancellor glossed over the measure in his Commons statement, saying only that local authorities would have more ‘flexibility’ on setting rates.

But documents published by the Treasury have confirmed a rule change will allow councils to push up rates by 5% without asking voters for permission.

The budget tears up guidelines which means councils must hold a local referendum if they want to put tax up by more than 3%.

It’s estimated the move could see families in band D properties paying more than £2,000 a year for the first time ever. 

With social care services under acute pressure, the majority are highly likely to turn to the extra money-raising powers in order to fund services. 

It means that another raid on household budgets is looming in April 2023 after a day in which taxes have gone up and spending on services has been slashed. 

The move will leave Rishi Sunak and Mr Hunt open to the charge that they are breaking another of their own manifesto pledges. 

The amount of council tax a person pays is set according to the value of the property they live in (Picture: PA)

In 2019, the party said ‘local people will continue to have the final say on council tax, being able to veto excessive rises’.

When he became prime minister last month, Mr Sunak said the manifesto was the ‘heart’ of the party’s mandate and vowed to ‘deliver on its promise’. 

The full text of the budget read: ‘The government is giving local authorities in England additional flexibility in setting council tax by increasing the referendum limit for increases in council tax to 3% per year from April 2023.

‘In addition, local authorities with social care responsibilities will be able to increase the adult social care precept by up to 2% per year.

‘This will give local authorities greater flexibility to set council tax levels based on the needs, resources and priorities of their area, including adult social care.’

Frances O’Grady, general secretary of the Trades Union Congress (TUC), warned against pursuing a second wave of austerity in 12 years ahead of the statement. 

She told the BBC that the strategy ‘failed’ under George Osborne and said the policy would hit ‘working people’.

Ms O’Grady continued: ‘We have been suffering weak growth as a country ever since, because it was killing the golden goose.

‘If you are starving the NHS, our education and skills system, of funding that has an impact on the economy because we need a healthy workforce, we need educated, skilled and trained workers.

‘Now we really need big investment in green infrastructure and our public services, if we’re going to grow.’

Delivering his budget, Mr Hunt said ‘as Conservatives we do not leave our debts to the next generation’.

He said ‘anyone saying there are easy decisions are not being straight with the British public’.

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Changes snuck into the autumn statement mean local authorities can put rates up by 5% without seeking permission from voters.