Lord Beecham
Main Page: Lord Beecham (Labour - Life peer)Local Government Finance Bill
Lord Beecham Excerpts
Baroness Hollis of Heigham
I support the amendments, particularly the one spoken to so ably and powerfully by my noble friend Lady Lister which overlapped with the amendment moved by my noble friend Lord Smith, speaking from his Wigan experience.
The Minister spoke earlier in the day about the need to get council tax benefit under control because of its doubling and so on over the past decade, 12 or 14 years. My noble friend, so to speak, revised his statistics by insisting that this was the result primarily of the increase in council tax. Let us do a counterfactual and assume that this system had been in place in 1997. The result is that all of that increase in council tax benefit generated perfectly properly by the increase in council tax would be expected to be carried by the local authority. A grant that starts at 90% would the following year be 75%, the year after that perhaps 50%, and so on. As council tax rose and as claims rose, and as the grant remained capped, the local authority would have to pick up more and more of these moneys. I do not see how it can reasonably be expected to do so. It is not just a question of take-up; where local authorities may differ is in the degree to which they may depend on a single industry. Norwich, for example, is very dependent on financial services, and in particular on the former Norwich Union, now Aviva. If that company was to make a major decision and relocate, for example, to Sheffield, which is a second source of Aviva jobs, it would have a dire effect on the Norwich economy, and on the demand for benefits, including council tax benefit. The local authority would have no obvious resources with which to respond to what my noble friend Lady Lister called an economic shock.
For a number of reasons, there will be an ethical dilemma. First, it is not in the council’s interest to promote people’s entitlement to benefits they should have—and we know that pensioners underclaim. Secondly, the council can be very vulnerable to significant economic shocks such as the closure of a factory or even, with the NHS consultation coming through, of a local hospital, where we could very well see 1,500 jobs go very quickly. Many holders of those jobs will be poorly paid women who will come into the council tax benefit claims system. They will be trying to get money from a limited pot, and the resources available to others will diminish. The third problem is that there will continue to be modest future council tax rises, and unless the money keeps pace with that increase, taking into account inflation and everything else, we will find that people who receive aid with their council tax benefit will get a smaller and smaller share of the moneys that they should get.
This means that we will be asking local authorities each and every year to revise their scheme not so much because of local needs but because the amount of bidding for it has outpaced the resources available. I fear that if the Minister does not take this issue very seriously, she will embed instability into the future projections of local authorities’ need to fund their council tax benefit system, so they will continue each and every year to have to revise their scheme to take account of the new needs and take-up, and of the increase in council tax. Unless we have some back-up mechanism to enable local authorities to fund this, we will have major problems down the road that—bluntly—could make some poll tax issues look quite small by comparison.
Lord Beecham
My Lords, the localisation of council tax, coupled with the localisation of the social fund, will give local authorities the unenviable task of dispensing a capped budget on two important areas of welfare benefits. Hitherto, the responsibility for funding both schemes has come from central government. Now local authorities will have to administer the scheme, and presumably also deal with the local consequences in the form of pressures on their budgets and the difficulties that will be occasioned to many of their residents. It is another case of the Government passing the buck to local government, but not providing the resources for local government to deal with it.
The noble Lord, Lord Shipley, and I were both at one time leaders of a council that has done a great deal to promote the take-up of benefits—not only council tax benefits but other benefits as well. The welfare rights department and other agencies of the authority, in collaboration with the voluntary sector, succeeded to a significant extent in promoting claims. Over the past few years in particular, several million pounds were won for potential claimants, who had their rights enshrined in practice as well as in theory. This is fairly typical of local government across the piece. Nevertheless, something like £1.8 billion in council tax benefit remains unclaimed. Much of that is thought to be money that would have gone to owner-occupying old-age pensioners.
I congratulate the Government on one thing; I repeat the congratulations I uttered in Grand Committee. The change of style from a benefit to support—it was called a rebate in earlier days—may well encourage people, particularly perhaps elderly people, to claim. This is something that does not seem to have been taken into account in relation to the total amount of funding that will be provided. However, that is the only thing that one can congratulate the Government on because when I tabled a Written Parliamentary Question last year asking what steps the Government would be taking to increase the take-up of the benefit as it then was—and, for the moment, still is— the Answer was “nothing”. So even at that time the Government were not keen apparently to promote the take-up of these benefits.
Lord Beecham
“Arrangements for future council tax benefit schemes
The provisions of section 9 shall cease to have effect after 31 March 2016 and the Secretary of State shall make arrangements for the reintroduction of a national council tax benefit scheme consistent with universal credit.”
Lord Beecham
My Lords, this is an amendment of last resort, designed to ensure that the deeply flawed and ideologically driven provisions in relation to council tax benefit in this Bill, if enacted, will lapse three years hence, to be replaced by a national scheme compatible with universal credit—assuming, of course, that the latter is operational and effective at that time.
It is based upon a philosophical objection to the faux localism implicit in more than 300 different schemes in which councils will be expected to determine, in the manner of Poor Law guardians, what levels of council tax support will be afforded to individuals and families in a wide range of circumstances. We reject this abandonment of a national minimum entitlement to this and other benefits, as we reject proposals for differential regional pay structures.
The provision of a basic standard of living, whether by means of direct financial assistance through the welfare system and/or relief from charges for such imposts as council tax, is and ought to be the responsibility of national government. As envisaged in Amendment 108 in the name of my noble friend Lady Lister, which we have just debated, local authorities should have a duty to promote take-up and a discretion to enhance support, although not to limit or curtail it. To adopt a phrase now resonating in political debate, in terms of welfare, we are—and if we are not we ought to be—one nation.
We cannot ignore the context in which these changes are proposed, any more than we can ignore the implications for millions of people. The Government assume a fall in demand but, as we have heard several times today, the opposite seems more likely, even if the Government adhere to their policy of not promoting take-up. As we have already heard, the likelihood is that some pensioners at least will take advantage of the welcome change in the nature of the benefit, but, still, a large amount goes unclaimed. The stuttering economy is unlikely to afford many opportunities for full-time work to present working-age claimants while others, not least in the public sector, are likely to lose their jobs. In addition, changes to housing benefit will hit many households hard, whether the infamous bedroom tax or other pending reductions. In debates yesterday in this House and today in the House of Commons on the Housing Benefit (Amendment) Regulations, it appeared that some £1 billion in housing benefit would be lost, a considerable proportion of that to families or households with a disabled person living in them.
Baroness Hanham
My Lords, I thank the noble Lord for all the information he provided. I turn again to the position that local authorities will make up their own schemes, work out their budgets and decide within the mechanism of what they have got what they need to do. We have already said that they have the flexibility within those budgets to decide what they do to make the council tax support work. Considering putting this back for three years would not give any stability at all to this whole process.
Baroness Hanham
I am sorry; that is quite right. I hope and expect that, by that stage, things will be well settled down and we will have moved on substantially so that that is not necessary. The Government will resist the amendment.
Lord Beecham
My Lords, in the absence of any indication of positive support from the Government or anywhere else in the House, and given the lateness of the hour and the relatively small number of Members, however talented, that we have around us, I feel obliged—very reluctantly—to withdraw the amendment.
Lord Tope
My Lords, I support the thrust of these amendments. I do not imagine that the noble Baroness intends to put it to the vote at this hour. I am not entirely certain that it is appropriate for it to be in the Bill anyway but she certainly raises extremely important issues, which I am quite sure, in a few moments, the Minister will agree with. I would like to endorse that and see how we can take this forward—probably in discussion with the Local Government Association and certainly through issuing good practice. It does not necessarily have to be the Government who do that. The Local Government Association could do that. But these are important issues which need to be addressed.
Lord Beecham
I certainly endorse what the noble Lord, Lord Tope, said and support the thrust of the noble Baroness’s amendments. The first is a matter essentially for the local authorities. The second impinges on the role of bailiffs. We had a discussion in the Committee stage of the Crime and Courts Bill when I moved an amendment urging the Government to produce a regulatory system for bailiffs, about which there had been a great deal of controversy. The previous Government had passed the Tribunals, Courts and Enforcement Act 2007 which envisaged a code of practice dealing with a whole range of issues, some of which were touched on in the noble Baroness’s Amendment 109ZB.
We were informed in the Committee stage of the Crime and Courts Bill that the consultation period that the Government had initiated about that whole area was ending on 14 May and that conclusions would be reached in the autumn. Well, we are in the autumn—we avoided having a summer in the mean time—and it would be interesting to know how things are going in that respect, although I do not expect the noble Baroness the Minister to know offhand. It seems to me, and it might seem to the noble Baroness, Lady Meacher, that it would be sensible to draw the two discussions together, because certainly as far as the role of bailiffs is concerned, clearly critical to Amendment 109ZB, there are also wider implications. I believe that the noble Baroness, Lady Northover, was dealing with this matter, but I think that she may have moved on and it is probably the noble Lord, Lord Taylor, who now has the remit for this. It would be helpful if the Minister could consult with whoever is now dealing with this matter to see what is happening on that front so that we can have a clear indication of the Government’s thinking—I hope before Third Reading, which does not leave a lot of time—so that the noble Baroness might have an opportunity, if necessary, to press something on that occasion. Therefore it would be helpful if the Minister would indicate that she would be prepared to take this issue back, looking at it with the other department and letting noble Lords know how the land lies in respect of bailiffs and enforcement measures generally, but in particular in relation to council tax.
Baroness Hanham
My Lords, I thank the noble Baroness for moving this amendment. Again, we had some discussion about it in Committee. I have some sympathy about the way in which these enforcements are carried out and the fact that, as the noble Baroness said, sometimes they may simply not be known about.
Again, this is a matter for local authorities. They have to recognise that they have to treat this issue sympathetically, pragmatically and sensibly. I know that it is felt that they do not always do that. I do not think that it is a government direction to do that but—I notice the expression on the noble Baroness’s face—I do think that we can do something in terms of guidance on how they go about this. I will combine, if I may, the two points about guidance because the noble Lord, Lord Beecham, raised the question of the MoJ consultations. We know that those have been concluded, and we also know that there has not yet been a result from them because we have been pressing to see whether we could get anything for today. The MoJ is looking at the question of bailiffs very widely, and we need to look at it from the point of view of enforcement of council tax issues.
I would like to suggest to the noble Baroness that we issue guidance from the DCLG, and that she and her advisers have an opportunity to talk to us about how that guidance should be set up and what should be included. I do not guarantee that we will take it all on board but I think that there is much experience around there that would be helpful. Once the MoJ comes to a conclusion and gets its guidance sorted out, we can pull these together so that there is a comprehensive document. Given that I understand the noble Baroness’s concerns and that we will respond in this way, I hope that she will be willing to withdraw her amendment.