Londoners to be hit with tax hike as Sadiq Khan sets out 2021 budget

A 9.5 per cent tax hike will be hitting Londoners from April as Sadiq Khan pushed through his 2021 budget.

The rise only applies to the portion of council tax paid to the Greater London Authority – Londoners’ overall tax bill also includes a portion paid to their individual borough.

The Mayor of London’s budget has been approved in the London Assembly – despite more members voting against it than supporting it.

The London Assembly has the power to amend the mayor’s budget but cannot reject it outright

With no amendments passed, it is deemed by law to have been approved despite members voting 12 to 11 (with one abstention) against it.

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Speaking at yesterday’s meeting (Thursday, February 25), Mr Khan said that the budget had been put together “under difficult circumstances” and pointed to the financial toll that the Covid-19 pandemic has had on the city.

Mr Khan condemned the “new era of austerity” the Government seemed “determined” to usher in.

He went on: “Despite these huge challenges, I remain optimistic about London’s future. We can start rebuilding London so that it is an even better city after the crisis than it was before. This is exactly what this budget sets out to help deliver.”

Details of what the final budget would include were revealed last week, with an extra £182.8 million of income for the GLA compared to the previous draft due to higher-than-expected returns from council tax and business rates.

Sadiq Khan this month revealed plans to invest an additional £38 million in the Metropolitan Police as well as a £5 million to help the safe reopening of London’s economy.

The Conservatives had proposed an amendment that would scrap the increase in council tax and instead save £95 million by reforming TfL’s bonus scheme and pensions, doing away with nomination passes, reducing time given to TfL staff to carry out trade union duties and scrapping the planned Commission for Diversity.

Susan Hall, leader of the GLA Conservatives, said: “Londoners can’t afford Sadiq Khan’s council tax hike – that’s why we’ve put forward an alternative budget for London.

“Our plan would fund London’s concessionary fares, invest in policing and create a new £50 million recovery fund, without asking Londoners to pay a single penny more in council tax.

“The Mayor could save nearly £100 million by scrapping his statue-toppling commission, cutting his PR budgets and reforming Transport for London. He doesn’t need to increase council tax.”

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But the amendment was voted down by Assembly members, with Labour member Len Duvall commenting that putting up council tax “is what you have to do… if you want over 60s bus passes and if you want under 18s concessions”.

An amendment was also put forward by the Green Party that proposed £3 million of support for young homeless people and an initial £400 million investment in houses for key workers without the need to further increase council tax, but this was also voted down.

The Assembly did, however, pass motions that call on the Mayor of London to write to the Transport Secretary and Home Secretary respectively with regards to devolving vehicle excise duty and providing a timeline for when London will receive 6,000 new police officers.

My London – Local News