Households could face significant increases in council tax under a plan understood to be under consideration by chancellor Jeremy Hunt and prime minister Rishi Sunak as they explore new options to fill near £60bn black hole in the government finances.
Hunt’s autumn statement on 17 November is expected to set out an austerity package of spending cuts and tax hikes.
Many households will hope that the chancellor is merely floating the council tax idea in the media now, with a view to eventually presenting actual plans that appear to be less brutal than expected.
According to the ideas floated yesterday, the government would remove the 2.99% cap on annual council tax hikes above which English local authorities are required to hold referendums.
Removal of the cap would clear the way for town halls to impose rises close to the rate of inflation, currently at 10.1%.
With an average annual charge of £1,966 for a Band D property in England, a 10% increase in council tax would add almost £200 to household bills.
Other options being considered are believed to be a hike in the 45p top rate of income tax for high earners, potentially restoring it to the 50p level inherited from the Labour government in 2010.
