INFLATION FIGURES: COUNCIL TAX RISES MAKES INTEREST RATE CUT MORE DIFFICULT
12.03.26pm BST (GMT +0100) Tue 20th May 2003
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Matthew Taylor MP, Lib Dem Shadow Chancellor of the Exchequer
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Commenting on this morning's inflation figure of 3% with the largest increase in prices under the 'housing' heading "mainly due to higher council tax bills", Matthew Taylor MP, Liberal Democrat Shadow Chancellor, said:
"This confirms that Council Tax increases are having a significant impact on ordinary families and on inflation."
"Higher Council Tax bills are making it more difficult for the Bank of England to cut interest rates and free business to invest."
"Gordon Brown's stealth tax strategy is reaching its zenith in Council Tax rises. The Chancellor is using the unfair Council Tax system to boost spending on public services and letting local council take the blame for booming bills.
"After 6 years Labour has taken no action to address Council Tax inequality. It is high time local taxes were based on the ability to pay just like national income taxes."
ENDS
Notes to editors:
1. RPIX - the inflation target used by the Bank of England - excludes mortgage interest payments but not council tax. Hence the high increases in Council Tax this year are keeping up the rate of RPIX - so making it more difficult for the Bank of England to cut interest rates.
2. This morning's press release from ONS confirmed that "The largest upward effect on the all items twelve-month rate came from housing... mainly due to higher council tax bills".
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