Starmer launches £1.8bn council tax raid – while paying less than a family in Durham

Prime Minister and Chancellor enjoy some of the lowest rates in the country

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Sir Keir Starmer has launched a £1.8bn council tax raid on households while enjoying some of the lowest rates in the country.
The Government confirmed on Wednesday that councils will be allowed to raise the levy by a maximum of 5pc in 2025-26, adding £110 a year to a normal bill.
But both the Prime Minister and Chancellor Rachel Reeves face a smaller increase in pound terms thanks to Westminster’s below-average council tax rates.
A typical Band D homeowner pays £2,171 according to government figures. But the charge for Number 10 Downing Street is thought to be £1,946, and the same for Number 11, the Chancellor’s official residence. This is despite the fact both are Band H properties, the highest tax band.
It means Sir Keir and Ms Reeves pay hundreds of pounds less per year than average property owners in areas with particularly high council tax burdens such as Rutland, Nottingham and Dorset, where a Band D household forks out over £2,500 a year.
A 5pc increase for these homeowners would amount to £125 compared to the Prime Minister, whose council tax bill for Number 10 would go up by £97.
Properties are placed in one of eight bands that determine the level of council tax charged, but councils apply different rates for each band.
Households in Band H properties in areas like Easington Colliery, a village in Durham, pay double their Westminster counterparts at more than £5,000 a year.
These homeowners face an annual rise of about £250 if the council hiked rates by the full 5pc.
The Government has decided to leave the 5pc cap unchanged in order to raise an additional £1.8bn for the Treasury.
Councils are allowed to put up their bills by up to 5pc each year, with any increase beyond this level requiring government permission or a referendum.
John O’Connell, of the lobby group the TaxPayers’ Alliance, said: “The confirmation of a referendum cap on council tax increases will bring only temporary respite for taxpayers given the grim reality that inflation-busting hikes are on the way regardless.
“But what is particularly shocking is the extent to which many politicians are themselves immune or shielded from these tax rises, including the Prime Minister himself.”
Many councils are expected to increase bills by the maximum owing to serious financial pressures. One in four councils said in a recent Local Government Association survey that they faced bankruptcy in the next two years without emergency government support.
Council tax critics said the Prime Minister’s below-average bills exposed the “regressive” nature of the system which is based on 1991 valuations.
Band H is reserved for properties worth more than £320,000 in 1991, while Band D applied to properties valued at £68,001 to £88,000.
In Westminster, council tax makes up just 0.06pc of property values on average, according to analysis by Fairer Share, a campaign group calling for the abolition of council tax, compared to 1.31pc for properties in Hartlepool.
Andrew Dixon, of Fairer Share, said: “With living costs rising across the board, the idea that council tax hikes are on the horizon is both unsettling and unfair—especially when you consider the stark inequalities in how council tax burdens are distributed across the country.
“It is unacceptable that households in places like Hartlepool are bearing a disproportionately higher share of the council tax burden than those in Westminster.
“In areas with lower property values and lower average incomes, residents find themselves paying higher council tax bills relative to their income and property worth. This is a systemic inequity that reflects the outdated and regressive nature of our current council tax system.”
Ministers living in official residences must “ensure they meet all personal tax liabilities, including council tax, if the residence is deemed to be their main residence”, according to the Ministerial Code.
Downing Street refused to comment.
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