Richmond Park News: 25 March 2022
On Wednesday the Chancellor announced his Spring Statement, a mini-budget which struggling families hoped would provide some kind of assistance as we enter a devastating cost-of-living crisis -- one that may bring the biggest fall in living standards since records began in the 1950s.
The Liberal Democrats are clear about what we think this kind of help should look like: a windfall tax on the super profits of oil and gas companies that could raise billions to help people with their energy bills, and an emergency cut to VAT that would put £600 back in the pockets of the average family. To see neither these policies, nor any other measure that addresses the scale of the crisis, was disheartening.
One of the Chancellor’s announcements was an increase to the threshold at which people will start paying National Insurance. However, upon closer inspection I noticed that this change will not come into effect until July, whereas the new National Insurance rise begins in April. This means that for three months, families will feel the full force of the tax hike without any cushioning from the raising of the threshold. Liberal Democrat analysis shows this delay will result in families facing an extra tax bill of £2.1bn.
COUNCIL TAX ANNOUNCEMENT
Many constituents have been in touch to ask me about their council tax bills, which are due to increase by 1.99% in Kingston and 1.94% in Richmond for 2022-23. There will also be an increase in the amount charged by the Greater London Authority for police, fire and transport services across London, which is billed alongside the council tax. Of the rises, 1% is being charged through the social care precept - additional money that local authorities are allowed to charge specifically to meet the cost of its social care obligations. Only 0.99% in Kingston and 0.94% in Richmond will be used to pay for local services, and this is in the context of inflation rates that are expected to hit historic highs of 8% later this year.
Local authorities receive income from a variety of sources, including central government grants, business rates retention and fees and charges for specific services. Council tax is charged to residents to make up the remainder of the income required to pay for services, and is levied on households depending upon their property band. Property bands were set in 1991, according to market valuations on that date
Richmond and Kingston are two of just three councils across London to get no central government funding (via a Revenue Support Grant) at all, which means they need to collect a much greater proportion of their income via council tax. The means of allocating Revenue Support Grant are somewhat opaque, but levels of deprivation are a key factor. You can see from this graph how much central government money is allocated to London boroughs.
Kingston gets no revenue support grant because the Conservative-led council opted out of receiving it in exchange for a greater proportion of business rates in 2015. However, as the chart shows, Kingston continues to receive a comparatively low proportion of its business rates collected, compared to other London boroughs.
You can see full details of how the decisions about council tax were made in Richmond here, and Kingston here
Are there alternatives to raising council tax when the cost of living is so high? Surprisingly, the Conservative opposition in Richmond did not offer an alternative plan to the administration’s proposal. The Conservative opposition in Kingston proposed to cut services to support victims of domestic violence and measures to combat climate change, which would only have saved residents a few pounds each but would have had a considerable impact on vulnerable people and the Council’s net zero targets.
I know that people are finding it tough to manage bills at the moment and I have included some information on measures that may help on my website