In a surprising turn of events, Mayor Lutfur Rahman has declared a 4.99% increase in council tax for selected households in Tower Hamlets, deviating from his 2022 manifesto commitment to freeze rates for four years. The move, framed as a progressive step to address the cost of living crisis, has stirred both support and criticism.
Under this increment, 2% is earmarked for adult social care, while 2.99% will contribute to general spending at the Tower Hamlets Council, generating an additional income of £3.277 million. The decision, explained as a response to uncertain public sector funding and essential investments, challenges Rahman’s previous promise to shield the most vulnerable from rising living costs.
Defending the decision, Mayor Rahman highlighted the necessity to transform a regressive tax system into a progressive one, stating, “We are taxing the rich, those who are earning more than £49,500, to help those who are unfortunate. The rich, and those who can afford, should pay more than those who can’t afford.”
Despite efforts to alleviate the impact on lower-income households, some critics, like former Conservative councillor Andrew Wood, argue that the Mayor’s ambitious spending plans have forced this unprecedented increase. Wood noted, “He promised in his election manifesto not to increase Council tax at all, but circumstances have forced him this year to increase Council tax by the maximum rate allowed.”
To address concerns, Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, assured that the budget aims to safeguard low-income and vulnerable households. Those with an income less than £49,500 will not be affected by the 2.99% rise, and a Council Tax Cost of Living Relief Fund will be available for eligible households.
Labour councillor Marc Francis expressed shock at Mayor Rahman’s departure from his promise to freeze council tax, criticizing the potential use of funds for the Mayor’s office. He said, “Labour councillors will do everything we can to challenge this unnecessary council tax hike and the way much of the money raised is being used to serve the Mayor himself instead of the people of Tower Hamlets.”
As the 2024-25 budget report heads to the full council for consideration on February 28, the debate on balancing the needs of the community with the necessity of increased taxation is set to intensify in Tower Hamlets.