Council tax frozen until 2013, will it help?

Updated: 

George OsborneGetty Images

The party conference season is always full of interesting notions from oddballs who think they have found the solution to everything. Of course, when those particular oddballs are in power it's particularly interesting, because those notions have a good chance of becoming policy.

George Osborne's solution to all our ills is a freeze in council tax. So will it work?


The freeze
The freeze will keep council tax from rising for another year, so it is frozen until at least April 2013. Osborne says this will save the average family £72 next year (to add to the £72 they saved from the freeze this year). To fund it, central government will hand over £800 million.

The plan
The money is apparently sloshing around from an 'underspend' in Whitehall, so he won't have to find the cash anywhere, and we won't just end up paying for it further down the line (we have paid for it already!).

The move is part of Osborne's cunning plan to inject unspent money into the economy in the hope that it will kick-start some spending and fuel a bit of a boom. It is expected to be just one of the wheezes he puts together with the same aim in mind.

Will it work?
It's certainly better than a poke in the eye with a sharp stick. Families could do with a bit of relief from any quarter, so keeping council tax level is a start.

However, there are two questions. The first is whether we will really feel the benefit of a tax that doesn't go up. We won't have any extra cash sloshing around as a result, it's just that things won't get any harder. You have to ask yourself whether that in itself is going to start a spending boom.

And the second question is whether £72 is enough money to profoundly affect our lives for the better. The price of everything else is soaring so quickly that the saving is soon wiped out, so we are unlikely to feel particularly flush.

Of course we're not going to complain, a frozen tax is always better than a rising one, its just that this may not be quite the cure-all the government is hoping for.

SPONSORED FINANCIAL CONTENT