Keir Starmer dodges question about whether he'll keep cap on council taxes

Keir Starmer appeared to dodge a question about whether he will keep the cap on council tax during Prime Minister's Questions on Wednesday.

Kemi Badenoch, grilling Starmer during her second PMQs as the new Leader of the Opposition, suggested council tax hikes could be on their way after claiming local authorities face a £2.4 billion “black hole” next year.

She accused the PM of "making life more expensive" as she pressed him about his funding plans for councils in England.

"Will the prime minister confirm that he will keep the cap on council tax?” Badenoch asked, to which Starmer replied: “On the question of councils, she knows what the arrangements are.”

"I think the House would have heard that the prime minister could neither confirm nor deny whether the cap on council tax was being raised," Badenoch quipped.

The leader of the opposition went on to ask how much extra money local authorities will have to raise to cover the “social care funding gap” created by the Chancellor’s Budget and increases in employers’ national insurance contributions.

Starmer, who had earlier answered a question from Liberal Democrat MP Christine Jardine on healthcare funding, replied: “I just said £600 million. I repeat it: £600 million.”

Badenoch highlighted warnings over the risk of increased costs for care providers before Starmer accused the Tories of leaving local authorities in an “absolutely catastrophic state”.

The Conservative leader later said: “The prime minister probably does not realise that, on Monday, the Ministry for Communities, Local Government and Housing revealed that councils will need to find an additional £2.4 billion in council tax next year. That is a lot more than £600 million.

“I know that he has been away, but did the deputy prime minister [Angela Rayner] who runs that department make him aware of their £2.4 billion black hole?”

Starmer accused her of wanting "all the benefits" of the Budget but would not say how she would pay for it, before later accusing her of asking “fantasy questions”.

“So the magic money tree is back after two weeks in office," he replied. "They’ve learned absolutely nothing. We put forward a Budget which takes the difficult decisions, fixing the £22 billion black hole, investing in the future of our country.

“They say they want all of that, but they don’t know how they’re going to pay for it – same old Tories.”

The Tories have cited responses to written parliamentary questions in which ministers said estimated core spending power (CSP) for local government will increase from £64.7 billion in 2024/25 to £68.4 billion in 2025/26.

The party claims the Budget is not providing enough new funding to cover this, leading to Badenoch suggesting council tax hikes may be one of the solutions.

Ministers insist the CSP is subject to data changes and final figures will be published as part of the 2025-26 local government finance settlement.

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A No 10 spokesperson later confirmed to reporters that the council tax threshold "remains the same".

Council tax is set by each local authority in England. However, the government sets thresholds for council tax increases.

Each year, the government publishes referendum thresholds for council tax hikes. If local authorities increase their council tax above that cap, they are required by law to hold a referendum.

Councils usually can only raise their council tax by no more than 5% per year - unless they have government permission to go higher.

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