Labour to keep cap on council tax bills

The Shadow Local Government Secretary promised town halls a raft of new freedoms including London-style powers of transport and control over money generated by business rates during a campaign visit to Garforth.

But he confirmed Labour would not lift the cap imposed by the Coalition on council tax bills which currently means local authorities wanting an increase of more than two per cent most hold a referendum.

Pledging to retain the cap will prevent the Conservatives accusing Labour of paving the way for tax hikes but will provoke tensions with local government figures, including many in his own party.

Council leaders have argued the cap is undemocratic and town halls should have the freedom to set their rates and be held accountable for their decisions by voters at local elections rather than spending money on organising referendums.

The costs and likely outcome of a referendum has so far put off any council from taking that option.

Asked about the cap on council tax bills today, Mr Benn said: “No we are not going to do that, we are not going to lift that.”

He added: “Finance is very tough for people. There is a cost of living crisis as you may have noticed we have been arguing.

“And in those circumstances, look councils know that is the case, they know how little money some of their constituents have got.

“They know in the case of my constituency I’ve got 1,900 familes hit by the bedroom tax, fundamentally unfair so by the way one other thing we are going to do which will help them is to abolish the bedroom tax.

“No we are not going to change those arrangements but we are going to give that greater fiscal freedom in the form of the 100 per cent retention of business rate income.”

Mr Benn, who is defending his Leeds Central seat at the election, claimed councils serving the poorest areas had been hit hardest by funding cuts under the Coalition pointing to figures suggesting the spending power of Leeds City Council has been cut by £135 per person compared to £42.34 in West Oxfordshire, home of David Cameron’s constituency.

He said: “The Government says ‘we’re all in this together and those with the broadest shoulders should bear the biggest burden’.

“If that is the case why have you done the very opposite when it comes to allocating the money?”

Mr Benn promised fairer funding for councils under a Labour government which would also scrap the ‘new homes bonus’ currently used to reward authorities where houses are built with the money returned to council budgets.

He was in Garforth to campaign with Veronica King, Labour’s candidate for the Elmet and Rothwell constituency currently held by the Conservatives with a majority of 4,521.

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