Millions of families face being clobbered with mammoth council tax hikes as Rishi Sunak considers lifting a cap on bill rises.
At the moment England’s town, county and city halls cannot increase charges by more than a threshold - usually 2.99% - without holding a referendum.
The Tories promised to keep this “veto” in their 2019 election manifesto, saying: “Local people will continue to have the final say on council tax”.
But they are now in talks about lifting the threshold for a referendum or even, according to reports, removing it entirely.
It’s understood Treasury officials are looking at “flexibilities” in the referendum limit as they find billions in tax rises for next week’s Autumn Statement - while trying to raise benefits and pensions with 10.1% inflation.
The PM is also looking at slashing the £150,000 threshold at which people pay the 45p Income Tax rate - weeks after Liz Truss tried to abolish it completely.
The Local Government Association warned authorities would have to raise council tax by “well over 10%” if a current black hole is filled by tax hikes alone.
That would be “neither sustainable nor desirable given the current cost of living crisis”, the body representing 350 councils warned.
Councils are already facing a £2.4bn gap in their budgets this year since they were set in Autumn, due to inflation and rising minimum wage.
An LGA spokesperson said: “While council tax is an important funding stream, it has never been the solution to the long-term pressures facing councils.”
It raises “different amounts in different parts of the country – unrelated to need - and [adds] to the financial pressures facing households.”
Average Band D council tax bills are now £1,966 - after shooting up by more than £500 a year since the Tories took power in 2010.
This year's rise alone was £67 compared to last year's figure of £1,898.
Most councils responsible for social care were told they could raise bills by 2.99% - 1% for care and 1.99% for general funds - in 2022/23.
But Mirror research suggested 63 out of 151 in England were lifting bills by more than 3% - with Bolsover’s bills rising by a whopping 5.33%.
The County Councils Network said its members were “grappling with £3.5bn in inflationary and demand costs this year and next” but warned many families “continue to be impacted by the cost-of-living crisis.
“Large-scale council tax rises are not the answer to the scale of the financial challenges councils face, and would be unfair and unacceptable for residents.
“Therefore, the priority should be for government to allocate more funding for councils in next week’s Autumn Statement.”
Rishi Sunak and Chancellor Jeremy Hunt are drawing up £33billion in spending cuts and £21billion in tax hikes by 2027 as part of the Autumn Statement.
It’s understood the pair are also looking at lowering the £150,000 salary at which the 45p rate of income tax kicks in.
They have also discussed raising the top rate of income tax, which was 50p until it was abolished by George Osborne in 2013, but this is thought to be less likely.
A government source said: “When you’re trying to fill a black hole of nearly £60billion, everything is on the table.”
Either change to the top rate of income tax would be the final blow to Liz Truss ’s aborted legacy.
The shortest-serving Prime Minister in history began the road to her downfall with a late-night U-turn on her plan to scrap the 45p rate.
Instead the richest 660,000 earners in Britain would have paid 40p income tax on their high earnings, saving each person around £10,000 a year.
