From April, millions of people across Britain will face higher bills for local services. And thanks to the Government’s maladroit handling of the introduction of “council tax support” to replace “council tax benefit”, some of the poorest families will bear the brunt of the changes. Hard-up households, including both those with no working adults and those with adults receiving only the minimum wage, will have to find between £96 and £255 a year. The worst affected – that is, single parents, working part-time, with children in childcare – could face increases of £557, a hike of more than 300 per cent.
Given the scale of Britain’s public debts, major cuts in spending are unavoidable. And it is true that the cost of council tax benefit has doubled in recent years. Indeed, about five million households in England now receive some support, of which perhaps half pay no council tax at all. Altogether, the welfare system costs taxpayers more than defence, education and the NHS combined. But cuts which hit the poorest disproportionately hard are no solution.
Meanwhile, the Government is trying to pass the blame on to local councils – which have to administer the 10 per cent cut to the council tax benefit bill. Three-quarters of local authorities say they will pass on the cost to families, rather than absorbing it themselves. But they blame the Government’s two-year council tax freeze and insistence that councils seeking increases of more than 2 per cent this year need approval in a local referendum.
Some local authorities will, of course, manage to maintain council tax support at current levels. But a postcode lottery, with identical individuals treated differently depending on where they live, is not acceptable. Furthermore, to leave so controversial a measure to the discretion of local authorities only adds an unwelcome political dimension to an already charged issue.
Nor is it likely that the Coalition will be able to transfer the political heat to local councils quite so easily. Although the next general election will not take place until 2015, the process of setting budgets for 2015-16 has already begun – with the Chancellor, George Osborne, telling ministers he must find another £10bn of spending reductions. Several senior ministers have expressed doubts about the strategy. Understandably so. Mr Osborne is committed to maintaining his “ring fence” around the health, education and international aid budgets; and there are also to be increases in spending on military hardware, including nuclear submarines and an aircraft carrier, the Prime Minister confirmed this week. The space within which further cuts can be found is, therefore, shrinking rapidly.
The Liberal Democrats are pressing for more spending on infrastructure and science, in an attempt to boost growth in an economy which is still well below its pre-crisis peak. And the Chancellor himself will be wary of cuts that add to the drag on the business expansion he hopes to fill the gaps left by the crimp on the public sector. There are two obvious candidates for the bulk of further cuts, then; one is the Home Office, and the other is welfare.
The Prime Minister has stressed repeatedly that pensions are sacrosanct, as are universal pensioner benefits such as winter fuel payments and free bus passes. But that will have to change. The reduction in council tax benefits now going ahead is already a step too far in squeezing society’s least well-off. For the state to continue to subsidise the lifestyle of wealthy old people is, quite simply, no longer either politically or morally defensible.
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