Council Tax: Government’s Proposed Increase

Tanmanjeet Singh Dhesi Excerpts

Monday 25th January 2021 Commons Chamber

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

As a former councillor—I was a councillor for a decade—I am extremely grateful to be able to take part in today’s important debate on increases in council tax.

In the depths of this chilling, coldest of winters, it is hard to believe that spring is on the way: the numbers of infections and deaths are rising; the hospitals are full; and the country is in lockdown. The vaccine obviously brings hope and I applaud those delivering the millions of doses, but we all know that there is still a mountain to climb. The harsh truth is that the economic price will be paid for years, if not decades. This is the worst recession for 300 years and the worst of any developed nation.

According to the Office for National Statistics, public sector debt is at an all-time high of £2.13 trillion. At the same time, tax revenues are down 0.7% year on year, and the Bank of England says that the unemployment rate will peak at 7.7% in April to June of this year. We rightly ask: what is the best possible policy to prevent economic carnage such as we saw in the 1930s and the 1980s, to create growth, to build better services, to protect jobs, and to make our economy stronger? We rightly ask: who should shoulder the biggest burden? Should it be those who are most able to afford it, or those who are least able to do so—the people who put on the personal protective equipment or the people who profiteer from selling it at exorbitant prices?

Ministers want a continuation of austerity and they want the poorest and the most vulnerable to pay for the crisis. Their proposed increase of up to 5% in council tax is further proof of that. It is not just morally wrong to increase council tax in the depths of a pandemic, but economically illiterate. As the Institute for Fiscal Studies states:

“Now is not the time to raise taxes; the economy is still weak and the recovery only just starting.”

We have had the pay freeze for key workers. We have cuts to universal credit on the way. We have seen increases in unemployment and growing reliance on emergency food parcels. In Slough alone, food banks distributed 6,533 food parcels to people in the past year. Now the Government want to increase council tax. In Slough, that would mean an increase in band D of £88. That represents the difference between turning on the heating or sitting in the cold; or between eating three meals a day or going hungry. There will be less money to spend in the local economy, hitting local shops and services. We need strong, resilient public services. When faced with a crisis, we do not need Serco; we need Slough Borough Council, the NHS, the armed services and all the amazing public services that make up the public sector.

It is nearly a year since the Secretary of State addressed more than 300 local government leaders, and the official press release, dated 16 March 2020, is still on the Government website. It says:

“The government stands ready to do whatever is necessary to support councils in their response to coronavirus, the Local Government Secretary confirmed to council leaders today (16 March 2020).”

I repeat, “whatever is necessary”. Have any other words turned to ashes so swiftly? By 4 May, the Secretary of State was telling councils not to labour under the false impression that they would be guaranteed funding from central Government. Well, who created that false impression in the first place? What dishonesty! It is no wonder that councils feel absolutely betrayed. My right hon. and learned Friend the Leader of the Opposition and my hon. friend the shadow Secretary of State for Communities and Local Government have recently written to the Government calling on them to think again, to protect families and to boost the economy. They are right, and that is why I shall support the Labour Opposition motion tonight.

[Several hon. Members rose—]