Good news for London's council taxpayers

The Evening Standard front pages today that all eight of London's Labour councils are to freeze council tax in their forthcoming budgets. This is undoubtedly good news, and sets the stage for some welcome inter-party competition over low taxes.


The gold standard in London has for the last three years, of course, been Hammersmith and Fulham with their 3% tax cuts each year. It would of course be ideal if these Labour Boroughs were following that example, but failing that a tax freeze is certainly welcome - and far better than the huge tax rises we've seen over the last decade.


Announcements like this are political dynamite, for a number of reasons.


This will affect every council in the land - claiming that it's impossible to do anything other than raise taxes only works if every council is doing so. Hammersmith & Fulham exposed that for the lie that it is with their radical, successful and popular tax cuts and blew the whole game open. Other councils out there will have a hard time explaining to their voters why a freeze is possible in Barking and Dagenham but not where they live.


The Tories and Lib Dems in London have particularly difficult questions to answer - nationally, they are (rightly) increasingly talking about value for money and lightening the load on taxpayers. To make that stand up they need to demonstrate they are doing it locally. Whilst H&F have set a great example, there are undoubtedly other Tory Boroughs which are considering quite sizeable tax rises. Will they pledge a freeze as well, now?


This also tells us that the TPA's message about low taxes has really got through. The fact that it is Labour councils, who would stereotypically be less sympathetic to low taxes, doing this is an encouraging sign that politicians across the spectrum can no longer ignore that message.


The really great news from all this is that the battle is now well and truly joined. As we all know, competition produces improvement, and if all the parties are competing with each other to produce the most radical low-tax ideas then that can only be good news for taxpayers.

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