by Jonathan Eida, researcher
Before the general election, the government made a clear promise: taxes would not rise for working people. In theory, they’ve kept that pledge. In practice, it’s a very different story.
Labour has already tiptoed close to the line with the rise in employer national insurance. While ministers can claim with a straight face that they haven’t increased personal taxes directly, businesses pass on higher costs to workers through lower wages, fewer job opportunities, or higher prices. It may be technically within the rules of their pledge, but certainly isn’t in the spirit of that promise.
This time, however, the government's approach is even more disingenuous. They're no longer even attempting to disguise tax rises on working people as employer contributions. Instead, they're forcing through these increases by making local councils the delivery mechanism.
The latest Spending Review assumes that councils across England will increase council tax by the maximum allowed amount before a referendum is required: five per cent each year. That’s well above the assumed two per cent inflation rate. If councils follow that route, as they have in recent years, then millions of households will face years more of inflation-busting tax hikes.
But because it's local authorities making the decision, rather than central government, ministers are attempting to maintain the fiction that they haven’t raised taxes. It's a sleight of hand worthy of Houdini.
The Spending Review boasts that:
“The government is taking action to return local government to a sustainable financial position, providing an additional £3.4 billion of grant funding in 2028-29 compared to 2024-25. This equates to an average annual real terms increase in overall local authority core spending power of 3.1% across the SR period.”
That sounds generous. But in reality, much of this supposed boost in funding comes from higher council tax, not new money from Whitehall. The government has simply assumed councils will raise more from local taxpayers, then counted it as part of their own increase in spending power.
Even with these hikes, however, the sums don’t add up. The County Councils Network has warned of a £2.2 billion black hole in funding for county and unitary councils next year. That means higher bills and more cuts to local services. Libraries, road maintenance, adult social care and children's services are all likely to suffer.
What we're witnessing is a stealth commitment, designed to shield Westminster from accountability. While national politicians proudly proclaim 'no tax rises on working people', local councils are forced to deliver the painful truth, imposing significant council tax increases on already struggling households
The result? Working people are left worse off. The promise not to raise taxes may be intact on a technicality, but it is meaningless for those seeing hundreds of pounds added to their bills.
If the government wants to raise taxes, it should do so openly and honestly, not by shifting the burden to councils and pretending nothing has changed. Voters deserve transparency, not accounting tricks.