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Council pushing for record 16pc tax rise

Homes in Pembrokeshire
Homes in Pembrokeshire

Families in a Welsh county are facing the UK’s highest council tax increase of more than 16 per cent.

Pembrokeshire, which is run by a coalition of Labour, Liberal Democrats and Plaid Cymru, was accused of using “strong-arm” tactics on Sunday to pressurise councillors into approving the plans.

They will vote on Thursday on a budget including a 16.31 per cent increase in council tax, the highest proposed increase in the country for 2024-25.

It would add more than £200 to the council tax bill of a Band D household and would be the highest increase in Wales since 2000-01.

In England, councils are limited to a council tax rise of five per cent, unless they are effectively bankrupt and get special dispensation from the Government.

Birmingham, for example, will increase its council tax by 10 per cent this year and 10 per cent the next.

But none have come close to Pembrokeshire’s 16 per cent rise in one year.

In Labour-run Wales, there is no maximum increase in council tax.

Councillors receive ‘intense pressure’

In an email sent to all councillors from the S151 officer (equivalent to a chief financial officer) and the monitoring officer, councillors are told that if they vote against the budget, “it would be unlawful”.

They are told: “Wilfully or recklessly failing to set a budget would be contrary to the principles of public life set out in the constitution – particularly the principle of stewardship, and would undoubtedly bring the council into disrepute; which is a code of conduct issue.”

The email, seen by the TaxPayers’ Alliance, also says: “It is important that every member is absolutely clear that no amendments which affect the level of council tax increase for 2024-25 will be accepted at council on March 7.”

Elliot Keck, head of campaigns, said: “It is deeply concerning to see councillors receive such intense pressure from council officials who do not have to answer to voters.

“The council is proposing a record-breaking tax hike which will deal a devastating blow to household finances.

“Councillors should feel free to vote according to what they think is right.”

Mike Stoddart, an independent councillor, said: “Trying to strong-arm elected members into approving this massive council tax increase against their better judgment was likely to be counterproductive.

“For myself, I will do what I think is right by my constituents and no amount of threats will divert me from that path.”

Meanwhile, TPA analysis reveals that the average household will pay more than £1.2 million in tax in their lifetime, meaning they would have to work for 19.5 years just to pay off the taxman.

The research is the first part of a series of papers celebrating 20 years since the group was founded in 2004.

Even before Rishi Sunak froze income tax thresholds at April 2021 levels, the average family would pay almost £588,000 in income tax over their lifetime.

This is alongside nearly £214,000 in employee and employer national insurance contributions and £182,000 in VAT, although this does not account for the recent 2p cut to national insurance.

Previous TPA research found that the number of people paying income tax has surged by 4.5 million since 2010, with more than half of the increase coming since thresholds were frozen.

Meanwhile, the bottom 20 per cent of households, or families with a household gross income of £19,599, will work for almost 23.4 years to pay off their lifetime tax bill, the longest of any group.

The lifetime tax bill for the top 20 per cent of households, or families with an income of £144,685, would be £2,962,905 in direct and indirect taxes, which would take them 20.5 years to pay off.

The figures show that the average lifetime tax bill has only fallen on four occasions since 1977. During the Covid pandemic, the lifetime tax bill briefly fell from £1.2 million to £1.1 million.