How council tax benefit cuts have hit the poorest

More than a million low-income households are now required to pay the tax after the coalition cut support by 10 per cent last year.

While the baleful effects of the bedroom tax and the benefit cap have been well documented, far fewer have noticed the other large welfare cuts that was introduced last April: the abolition of Council Tax Benefit (CTB). Until that month, those households deemed too poor to meet the monthly charge received CTB to cover all or part of their bill. With 5.9 million recipients, it was claimed by more families than any other means-tested benefit or tax credit.

But last year the coalition scrapped the payment and transferred responsibility for the new regime from central government to local councils. At the same time, it cut the fund for support by 10 per cent. Councils in England were left with the choice of either maintaining current levels of support and imposing greater cuts elsewhere, or asking those who received a full or partial rebate to make a minimum payment. They were required to protect pensioner households, leaving the working-age poor to bear the burden of any increase. 

New research published today by the IFS shows what the results have been. Seventy per cent of English local authorities have introduced minimum council tax payments (forcing many poor households to pay the charge for the first time), with more deprived areas more likely to introduce them owing to a larger reduction in funding. Of the two million working-age households that could have claimed full relief under the previous system, 70 per cent (1.4 million) are liable to pay some council tax in 2013–14, with half liable for at least £85, a quarter liable for at least £170, and 10 per cent liable for at least £225. The new system led to an average increase of 30-40 per cent in the number of people seeking help from the Citizens Advice Bureau in relation to council tax debt between July and September 2013. Last October, Labour found that up to 500,000 vulnerable people had been summonsed to court for failing to pay the monthly charge. 

Labour-run local authorities were more likely than others to introduce minimum council tax payments, although the IFS notes that "this seems to be a reflection of the characteristics of LAs where Labour has a majority rather than a result of political preference". Once these factors were accounted for (most notably, the size of the funding cut and the number of low-income pensioner households), Conservative-majority councils were found to be more likely to introduce minimum payments: 14 per cent more likely than Labour councils and 25 per cent more likely than Lib Dem ones. 

Stuart Adam, a senior research economist at IFS and the co-author of the report, said: "Localising council tax support has, of course, led to considerable variation in the level of support available. Low-income working-age families are now likely to receive more help with their council tax if they live in a better-off area without too many low-income pensioners among their neighbours. Conversely working-age people living in poorer areas and in areas containing more low-income pensioners receive less help."

In response, Brandon Lewis, the local government minister, said: "Spending on council tax benefit doubled under Labour and is costing taxpayers £4bn a year - equivalent to almost £180 a year per household. Our reforms to localise council tax support now give councils stronger incentives to support local firms, cut fraud, promote local enterprise and get people into work. We are ending Labour's something for nothing culture and making work pay." But the steep rise in council tax is one reason why, for too many, work still isn't paying. 

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Council-run housing in Lambeth on November 5, 2012 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Donald Trump vs Barack Obama: How the inauguration speeches compared

We compared the two presidents on trade, foreign affairs and climate change – so you (really, really) don't have to.

After watching Donald Trump's inaugural address, what better way to get rid of the last few dregs of hope than by comparing what he said with Barack Obama's address from 2009? 

Both thanked the previous President, with Trump calling the Obamas "magnificent", and pledged to reform Washington, but the comparison ended there. 

Here is what each of them said: 

On American jobs

Obama:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.

Trump:

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

Obama had a plan for growth. Trump just blames the rest of the world...

On global warming

Obama:

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.

Trump:

On the Middle East:

Obama:

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy. 

Trump:

We will re-enforce old alliances and form new ones and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

On “greatness”

Obama:

In reaffirming the greatness of our nation we understand that greatness is never a given. It must be earned.

Trump:

America will start winning again, winning like never before.

 

On trade

Obama:

This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  

Trump:

We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body, and I will never ever let you down.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland