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Council Tax Benefit Localisation

Volume 543: debated on Monday 30 April 2012

3. What assessment he has made of the potential effect of council tax benefit localisation on low-income families. (105715)

An impact assessment is on my Department’s website. These reforms will give councils a greater stake in getting people back into work and will help to reduce the budget deficit. The Government are committed to supporting the most vulnerable in society and have been clear that pensioners should be protected and changes should support work incentives.

At a meeting on Friday local authorities from areas of high need, such as Chesterfield, Bolsover and North East Derbyshire, were still bemoaning the fact that they have just suffered a 19% cut in the money they receive from central Government. This proposal will mean another £500 million cut in areas of high need, which is equivalent to 10% for all those local authorities. It is high time the Government started listening less to press barons like Murdoch and more to the democratically elected voices in local government.

I think that the hon. Gentleman is letting his phobias get the better of him. No local authority has faced a reduction in its spending power of more than 8.7%, and the figures he talks about are not real at all. I know that he did not always support the Labour Government’s policies, but he was right behind them on building up the deficit. He now needs to get behind this Government in tackling that deficit.

Of course, it has been very beneficial to those on low incomes who are paying council tax and those who rely on council tax benefit support. I think that the Government should be commended for the action they have taken, and it is astonishing that some Members on the Labour Front Bench condemned the introduction of this proposal.

May I draw attention to my interest as declared in the Register of Members’ Financial Interests?

I remind the Minister that we are talking about cuts in council tax benefit, that the Government’s own proposal is for a 10% cut, not 8%, and that that will translate into a 16% cut for those who will bear the burden because of the protection of those over pension age, but extraordinarily, if the Government believe in what they are doing, why have they been so embarrassed as to have done nothing for the past three months? We have been waiting for Report stage of the Bill leading to the introduction of those changes, but it has been parked. Where has it been?

The right hon. Gentleman is of course a doughty fighter on these matters, and I assure him that the Bill will be back in the House within a week or two.

Is not the best way to help those on low incomes to freeze council tax, and is the Minister aware that Harlow’s Conservative district council has frozen council tax not just for one or two years, but for three years?

Clearly, a good way of reducing the cost to the state of the council tax benefit system, and the cost to the householder, is to freeze council tax, and I commend the hon. Gentleman’s local council on the work that it has done.

The Government’s own figures show that a cut of 16% in council tax benefit will cost the poorest families more than £161 a year, but does the Minister accept that, in fact, the cuts are likely to be far higher than that, up to 25%, depending on the number of pensioners in a local authority area? Does he think that this postcode lottery for the poorest families is fair? How can the Government justify cutting the incomes of 1 million struggling families while increasing the incomes of millionaires?

The hon. Lady of course is completely off track. In reality, local authorities will have choices about how they manage the reduction and be able to choose, through the design of their scheme, whether some awards should be reduced. They can manage the reduction by reconfiguring the funding of other services, through efficiency savings, by using reserves or with flexibility over the council tax, which the same Bill before Parliament gives to local authorities.