Labour’s big council tax lie

The party claims bills are cheaper when it’s in power – our analysis suggests otherwise

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Labour has been accused of misleading voters after promising not to raise council tax and claiming residents paid more under the Conservatives.
Ministers this month paved the way for council tax to rise by an average of £110 next April. It comes after voters were promised that taxes would not rise for “working people” under Labour.
Yet, as well as promising to freeze council tax, Labour last year claimed: “The Tories are raising council tax by up to 15pc. Conservative councils already charge £345 more than Labour ones.”
However, analysis for Telegraph Money reveals that those who live in Labour-run local authorities are likely to be paying among the highest rates in the country.
Council tax under Labour authorities is consistently more expensive for Band D properties, classed as the average, according to research by lobby group, the TaxPayers’ Alliance.
Council tax bills are made up of social care, fire authority and police costs, as well as a rate set by the local government. Some areas are covered by a county and district council, whereas others are controlled by a single body, either a metropolitan council or a unitary authority.
The TaxPayers’ Alliance split up a council tax bill – removing the rates set by the separate bodies, such as the Police and Crime Commissioner – to highlight how much the individual authority charges for its share. The analysis reveals the top 10 most expensive councils across the country.
Among metropolitan councils – local authorities that cover large urban areas – the most expensive is Labour-run Gateshead, charging £2,173.77 a year for its share. Next on the list, and the most expensive Conservative-run council, is Walsall at £2,084.55.
This means the most expensive Labour council charges £89.22 more than the Conservative equivalent. Out of the top 20 most expensive metropolitan councils, Labour controls 17.
Labour also runs the most expensive district councils in the country, with Ipswich at the top, charging £407.43 for its share of an annual bill.
In fact, a Conservative council does not appear in the top 10 most expensive district councils, which is dominated by seven Labour authorities.
It comes after Sir Keir Starmer was accused of rowing back on his commitments on council tax this week.
Local authorities were told they could raise council tax by a maximum of 5pc in 2025-26, despite pledges from the Labour Party to freeze council tax using money from a windfall tax on energy companies.
It echoes a move by the Conservative government in March 2023, when taxpayers were hit with a similar 5pc rise.
At the time, Starmer said working people could “rip up that council tax bill because you would not pay a penny more than you paid last year” under a Labour government. The Party has since gained 30 councils.
The average Band D rate in England for 2024-25 is £2,171, which is an increase of £106 or 5.1pc on the previous year, according to government figures.
Josh O’Connell, of the TaxPayers’ Alliance, said: “Taxpayers are completely dismayed by the 5pc hike in council tax.
“With Britons already suffering under a record high tax burden and a cost of living crisis, an uptick in their council tax bill is the last thing that they need. If the Government genuinely wants to help, they should reverse the increase in council tax.”
Matthew Pennycook, communities minister, told the Commons that the Government will raise an extra £1.8bn through council tax in 2025-26.
The most expensive unitary authority is Labour-run Nottingham, charging £2,155.33 a year. Whereas Conservative-run Northumberland, fourth on the list, charges £2,076.50, which is £78.82 cheaper.
The Telegraph found that Labour makes up 10 of the 20 most expensive unitary authorities.
Labour also topped the list for town and parish councils, with Falmouth charging £431.24. The second most expensive was Truro, which is not controlled by one party, with Band D bills of £401.98.
Out of the top 10 local authorities with the highest council tax relative to house prices, according to the TaxPayers’ Alliance, six were Labour-run: Hartlepool, Hyndburn, Blackpool, Gateshead, Blackburn with Darwen and Preston.
Sir Jacob Rees-Mogg, former Conservative cabinet minister, said: “Allowing council tax to rise above inflation is a cost to working people so breaks Labour’s manifesto commitment.
“Many inefficient councils waste money on pet projects, 20mph schemes and diversity officers and can now do so freely while piling up the bills for rate payers.”
Council tax values are based on the price of properties from April 1 1991 in England and April 1 2003 in Wales, and are split into eight bands.
Last year, it was found that Labour council’s charged £80 more on average.
“While some areas have had greater property pricing increases than others, council tax in England has increased by 79pc in real terms in the last 30 years,” the TaxPayers’ Alliance explained.
“This means that council tax payments have generally risen relative to both property prices and income, disproportionately affecting those in areas with lower house prices.”
The North East generally has the highest council tax rates relative to house prices, an area which has historically been dominated by Labour.
A Local Government Association (LGA) spokesman said: “In recent years, council tax-raising powers have increasingly been relied on by governments to increase councils’ core spending power.
“This means that many councils have faced the tough choice about whether to increase bills to bring in desperately needed funding to provide services at a time when they are acutely aware of the significant burden that could place on some households.”
Councils who want to increase tax by more than the 5pc limit have to get permission from the Government or hold a referendum.
Many councillors are now considering raising tax to cope with increasing financial pressure. One in four councils said they faced bankruptcy within two years without emergency support in an LGA survey.
Last year, Birmingham City Council declared bankruptcy, citing a £300m black hole.
Labour-run Coventry has said a 5pc council tax increase is very likely. Meanwhile Bristol council, controlled by the Greens and Lib Dems, has opened a consultation for a staggering 15pc rise.
And Labour’s Denbighshire council has warned tax could rise by as much as 12pc in 2025.
The 5pc rise is almost double the 2.3pc rate of inflation.
A spokesman for the Department for Housing, Communities and Local Government said: “It is for councils to decide on the level of council tax to set, but increases are limited to 5pc without a referendum.
“This is in line with the previous government to restrict those costs. Residents must then have their say on anything beyond that.”
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