Households face a £200 hike in council tax bills under plans being considered by Chancellor Jeremy Hunt as he prepares to raise £50 billion in next week’s financial statement.
Existing rules limiting council tax increases would be scrapped, paving the way for authorities to impose double-digit rises.
Increasing bills by the current rate of inflation, 10.1 percent, would add £198 to the average Band D bill.
The cash wouldn’t go directly to the Treasury but letting councils raise more from local taxpayers would make it possible to freeze or cut the funding provided by central government.
Authorities in recent years have been allowed to put up council tax bills by just three percent, including one percent ring-fenced for social care.
It’s one of a series of tough measures under consideration by Mr Hunt and Prime Minister Rishi Sunak, who plan to raise £25 billion from tax increases and £25 billion from spending cuts.
The Prime Minister said inflation is the “number one enemy” and pledged to do everything he can to “grip” the issue and limit rises in mortgage repayments.
Last week the Bank of England hiked the base interest rate by 0.75 percentage points to 3 percent, and warned the country is facing the longest recession in a century.
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