Why is only Hammersmith and Fulham cutting Council Tax?

Even with the recession biting, almost every Council in the country is expected to push up Council Tax bills in April. Mark Wallace of the Taxpayers Alliance blames an "arrogant consensus."

Thank goodness for Hammersmith and Fulham council. That was undoubtedly the reaction of the H&F residents this week when they learned that the council will, for the third year running, be cutting council tax by 3%. It is not only residents of the Borough itself, though, that are grateful to hear the good news, it is low tax campaigners around the country.

The immediate impact of the tax cut will be to give H&F residents a helping hand in the recession that people in other London Boroughs will miss out on. People squeezed by higher utility bills and minimal pay increases and worried for the future of their jobs will at least have some extra money in their pockets thanks to the council’s belt-tightening.

As a knock-on, H&F’s local economy will be better equipped to ride out the recession. With every single family able to spend even that little bit more money, the corner shops, pubs, high street shops, charities and other enterprises in the area have had a boost to their chances of surviving the downturn. Their staff, too, are therefore that little bit safer in their jobs.

The impact of Hammersmith & Fulham’s announcement can only be beneficial to local residents, but it is also of help to all of us across the country who want to see lower taxes at every council. When you think about it, the rarity of a tax cut is shocking. For most of us, if we were to get a letter through the door saying “Next year your council tax will be lower” it would either be down to a wishful hallucination, a clerical error or a rebanding that effectively revealed you’d been more than was intended for years.

There is an arrogant consensus across vast swathes of local government that council tax rises are inevitable – desirable, even – and the people will just have to put up with it. As one Local Government Association officer said to a TaxPayers’ Alliance colleague of mine recently, “You can say what you like but we’re still going to push tax up by 5%.”

That lazy consensus is costly both financially and managerially. In the short term, people lose out because their tax rises every year. Managerially, there is no impetus for reform, streamlining and efficiency improvements. If you swallow the LGA’s line that it is impossible to reduce cost, cut council tax and improve services then you are doomed to pay more and more for ever, whilst your services stagnate or decline. Any business which doubled its prices in a decade, whilst cutting service provision would lose its customers. Far too often, councils rely on the fact that tax is compulsory to avoid listening to what the public want.

Hammersmith & Fulham’s performance is key to undermining that consensus and bringing the lie to these claims of inevitable tax rises. The fact that they are cutting taxes, improving services and pleasing their local residents allows tax cutters everywhere to point out that the Emperor’s new clothes do not exist. It is imperative that voters, taxpayers and - above all councillors - across the country study their example. The H&F success story arms all of us with the necessary weapons to demand better, wherever we live.