Monday, October 03, 2011

Council Tax freeze

The top story at the moment is the continuation of the Council Tax freeze. This by itself wouldn't prompt me to write anything however the manner in which the morning news channels are obviously reading the government script does.

Apparently this freeze will on average save people £72 per year; except it won't and here's why. Imagine two energy companies A and B who charge the same average amount each year. Company A decides to increase its prices by £72 per year; company B doesn't. Anyone switching from A to B will save £72 per year; anyone sticking with B could be said to be saving £72 per year by sticking with B and not moving to A.

Now apply that to Council Tax; a monopolistic system which you are legally obliged to pay for. They're not saving us £72 per year they've simply decided not to charge us an extra £72 per year. How magnanimous of them; maybe we should send them a thank-you card?