Council Tax Benefit Localisation

Jonathan Edwards Excerpts

Wednesday 27th June 2012 Westminster Hall

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Diolch, Mr Howarth, for calling me to speak.

I congratulate the hon. Member for Makerfield (Yvonne Fovargue) on securing this important debate and on making a very informative speech. She speaks with great authority on these issues, as a former worker in the Citizens Advice service, a service that I am also very proud to have worked for before entering this place.

I will concentrate my remarks today on the effect of these proposals on Wales. Of course, I should begin by saying that I am not opposed to the devolution of council tax benefits to Wales; normally, I would be here in Westminster Hall strongly welcoming that move. However, it seems inherently wrong that it should be done with the insistence that a 10% cut be made to the amount of benefits that can be provided. Essentially, we are telling some of the most vulnerable members of our society, who currently rely on benefits to maintain their standard of living, that they will get less in future.

No justification has been provided for the cut at a time when many families are struggling to make ends meet and when the median income is declining sharply, as we saw from the HBAI, or households below average income, figures released recently. Following a week in which tax avoidance by multi-millionaires was the main news story, it is depressing that we are once again debating measures whereby the UK Government are attacking the living standards of those at the bottom of society—working people who require additional support.

There are 328,000 claimants of council tax benefits in Wales, making it one of the most widely claimed benefits in Wales. In my own local authority area of Carmarthenshire, there are 19,090 households that receive council tax benefit in one form or another—approximately 23% of all dwellings on which council tax is charged. Sadly, though, and at the risk of upsetting the colleagues around me today, I must say that the Labour Government in Wales have spent more time on scoring political points against the Tories in London than on developing solutions to the problem of a 10% cut.

The cut was first announced in the summer of 2010—immediately after the general election—and yet two years later, and only months before its implementation, the Labour Government in Wales are still complaining that they do not have the necessary information. Last week’s meeting of the Welsh Government with the Secretary of State for Wales was, according to media reports in Wales, not overly fruitful, although perhaps the Minister can update us on that meeting when he sums up later.

We are still waiting for the Welsh Government to announce their position on this cut, although hopefully they will do so soon, given the publication last week of a report from the Institute for Fiscal Studies, which made a number of suggestions. The IFS said that, to meet the 10% cut, the Welsh Government could impose a straight “salami slice” that would reduce the amount of support for all claimants. Alternatively, they could make reforms that would reduce the amount of support for council tax received by those living in higher-banded properties. They could introduce reforms that means-test support for council tax more aggressively, or introduce a reform to the current discount for single residents, changing underlying council tax liabilities.

We have yet to hear the Welsh Government’s response to the IFS report, but they have said that they face a challenging budget and will simply pass on the cuts in one form or another to Welsh local authorities. Given that Labour said in the election for the National Assembly of Wales that they would shield Wales from Westminster’s cuts, it is a gross dereliction of duty for it simply to pass those cuts on. That “challenging budget”, after all, comes as a result of Labour’s failure to reform the Barnett formula when they were in power in Westminster.

In the meantime, the Scottish Government have announced that they will protect recipients of council tax benefit from the cuts. The contrast between a strong Scottish National party Government in Scotland and a lethargic, supine Labour party in Wales could not be clearer. My party strongly favours fiscal responsibility and accountability for the decisions made by the Welsh Government, but this 10% cut should not be passed down to Wales by the Con-Dems and nor should it be passed on to the people of Wales by Labour.