Portsmouth Labour’s council group voted against proposals to change council tax support for residents at Full Council on Tuesday 15 November.

Here is the speech given by Cllr Stephen Morgan, Group Leader before Members of the Council:

“My Lord Mayor, Fellow Members,

 The decision to create separate local schemes of support for those in financial hardship from paying Council Tax is, in policy terms and logic, flawed.

And the rationale set out in the government’s consultation document, could have been written by ‘Sir Humphrey’ from Yes Minister!

It excludes significant elements of Council Tax administration from localisation including a whole category of people (pensioners) and specifically targets working age claimants.

The City Council’s own Equality Impact Assessment more accurately identifies the rationale for a localised scheme stating that it, “……. was introduced under the Local Government Finance Act to reduce the annual expenditure for Council Tax.”

We now have the absurd situation of a national system of local government taxation in the form of the Council Tax and a localised system of relief and support with different entitlements and exemptions based purely on where people happen to live, and the pressures on local authorities to find cuts in spending, not on their needs because these will be interpreted differently across the country.

The main proposal before us today is to introduce ‘Option 4’ to make a minimum council tax amount payable (20%) by all working age claimants so there would be no distinction between people available for work, have limited capacity for work and those on disability benefits.

The list of disability benefits that would be affected are listed on page 2 of the council report however the EIA states that, “We recognise that disabled people suffer much bigger obstacles to gaining employment which would enable them to afford paying council tax so we do not take their Disability Living Allowance or Personal Independence Payment into account a income”.

In spite of the exemption of DLA and PIP the council ignores the fact that other benefits have been awarded through a national system that recognises people’s entitlement and need, but will now require the use a portion of these benefits to pay towards council tax. The local scheme is therefore not integrated with the national benefits system, in particular Universal Credit.

The EIA also acknowledges that, “We are indirectly discriminating against all working age claimants as legislation dictates that people of pensionable age will not be affected by the changes but people who receive protection at the moment may need to pay something or more toward their council tax”.

There are also some supplementary changes proposed.

One is to introduce a minimum Council Tax award of £2.00. This is wrong in principle regardless of the number of people affected. A person who qualifies for council tax support but is entitled to a sum up to £1.99 per week will be denied their legal entitlement. What is to prevent the council from increasing this figure in the future to £3.00 or £5.00?

Consider, if the Inland Revenue said that a person was entitled to a tax refund but they were not going to pay it because it was less than £104.00?

The council propose to introduce a number of changes to align entitlement with Housing benefit Regulations where the EIA admits that “…it is unknown how many people would be affected as it relates to future events.”

The proposal to limit the number of dependent children affecting a claim to 2 will result in some families with continuing claims getting entitlement based on more than two children and could act as a disincentive for them to change their circumstances and end their claim because if they reapply they will come under the new rules and be disadvantaged.

The Hardship Fund is cash limited and discretionary with no right of independent appeal against decisions. There is potential for a clear incentive here to make decisions to ensure the cash limit is not breached.

The survey evidence shows that on the question of ‘should the council keep the current Council Tax Reduction Scheme’ only 43% said no while 57% said yes or they did not know (40% Yes, 17% DK) so there is no majority for a change from the total number of respondents. Don’t know is not support for a change but for the status quo.

Let us not forget that the localisation of council tax support was introduced under the coalition government with Liberal Democrat support. It was Danny Alexander as Chief Secretary to the Treasury who did this.

This type of policy has similarities with the introduction of Housing Benefit Subsidy Limitation which meant that council housing revenue accounts were not fully compensated for housing benefit spending.

So tenants rents were subsidising the housing benefit of other tenants, a divisive and inequitable policy given that tenants were likely to be low income households (the poor subsidising the poor).

For these reasons I urge Members to vote against these proposals”.

 

Advertisements