What’s going on with Council Tax Benefit?
To read Reading Borough Council’s website this week you could be forgiven for thinking that the government was abandoning all recipients of Council Tax Benefit to the threat of final demands and jail for non payment of Council Tax. They are not. To say, as RBC are, that the government is ‘abolishing’ Council Tax Benefit is at best a misrepresentation of what is going on and at worst scaremongering. Seriously ill or disabled people and pensioners on fixed income are not going to be faced with massive Council Tax bills.
So what’s really happening?
As we all know the State has been spending beyond its means since Gordon Brown was the chancellor. This has been cruelly exposed with the economic downturn. Added to that, we have an ageing population that needs a growing level of support. Very simply the government needs to find ways to spend less and reduce the deficit between spending and its income from taxation. Unlike the Left, Conservatives understand that there is no pain free solution to our economic woes.
So how does that affect Council Tax Benefit?
Local authorities such as Reading Borough Council raise council tax to help pay for the services they provide. The average council tax in Reading is now £1,288 per annum. Many people struggle to find this amount and so can apply for state support with the bill. If eligible the government pays some or all of the bill for them. In Reading some 10,000 households receive about £12.2M support from the government. To contribute to the reduction of the deficit, the government has reduced this subsidy by 10%. They will continue to support those currently in receipt of the benefit by over £11M per annum. Most people would not call that ‘abolishing’ a benefit.
No change for pensioners
Moreover about a third of those receiving the benefit are pensioners and the government has made it absolutely clear that pensioners will be unaffected by the changes. So any of the 3,700 pensioner households in receipt of the benefit can stop reading this article now.
But there are about 6,700 households with people of working age who also receive the benefit. Clearly if the recipients are incapacitated and unable to work then they will continue to receive support. Many others, although coping with some form of disability, are capable of work. Anyone who has watched the Paralympics over the last week cannot fail to have been impressed by what can be achieved by people with all sorts of disability.
Able to work?
But there remain a number of people who are quite capable of working but have found living on benefits has become a lifestyle choice. In Reading the official unemployment rate is 3.3% - that’s just over 2,000 people. But go into any restaurant or shop and you will meet EU citizens willing to travel and work in the UK. Others have travelled even further to find work here. Yet there are thousands of people born in the UK who are not working. Some obviously have had the misfortune of losing their jobs and are seeking re-employment but there are many others who are capable of working but choose instead to live on benefits. The government is making it clear to those that can but are unwilling to work that the rest of society will not continue to fund their lifestyle choice. It’s not going to be easy to move some people off benefits into work but it’s simply not fair to the rest of society that does work and pay their taxes. We also know that our ageing population will require a greater level of support and we simply won’t be able to go on subsidizing people of working age who choose not to work.
So Council Tax Benefit is not being ‘abolished’. It is being localised and it will be for authorities such as Reading Borough Council to help incentivise everyone capable of working to find employment. Reducing their benefits by 10% and assisting those who most need it is part of that policy. Conservatives recognise that borrowing and profligate State spending helped get us into this economic recession. A return to sound public finances is vital to the recovery.
Cllr David Stevens
7 September 2012