Labour-opposed benefit amendment fails

The party imposed a three line whip against the extra powers for local government sparking criticism from Labour leaders in local government as well as senior Conservatives and Liberal Democrats who had backed the proposal.

The LGA had calculated that a reduction of single persons discount from 25% to 20% would raise £313m and address the 10% funding cut proposed for next year.

The debate in the House of Lords came on the day that the government announced an extra £100m of funding to those councils that limit the amount residents currently exempt from council tax must pay in the future.

Lord Tope (Lib Dem) said the LGA amendment had crossparty support in local government and that it was Labour councils that would be hardest hit. It was, therefore, “inexplicable that the Labour benches have not been willing to sign up to this amendment or even discuss the working to make it more accepted to them”.

Lord Shipley (Lib Dem) added: “This is not the time for political tactics.”

The amendment was abandoned as Labour peers joined Conservative peers led by local government minister Baroness Hanham (Con). She described the proposal as a “tax increase on eight million people”, many of whom were not well off, she argued.

A separate amendment backed by Labour, to allow councils to continue with the existing scheme and be fully funded by government, failed by 201 to 242.

Gary Porter (Con), leader of the LGA’s Conservative group, said he was “extremely disappointed that Labour decided to whip the Lords against what would have been a longer term solution to this problem if everyone in local government had got behind it”.

Lord Mackenzie (Lab) told peers the party believed its amendment was a better solution and criticised the LGA’s “sticking plaster” solution for failing to protect pensioners and failing to limit reductions of the discount beyond 20%.

However, Barnsley leader Steve Houghton (Lab) described the party’s position as “wrong”. “If we can’t get the policy scrapped we need all the tools in the box, the biggest of all is single persons discount. We are not saying it should all be taken away, but a reduction from 25% to 20% discount would solve part of the problem for us.

“While I fully understand they want to see this thing stopped completely, and I agree with that, Plan B needs to be having that flexibility around single persons discount. I think they have got it wrong.”

The LGA Labour group declined to comment, as did the LGA ahead of the vote.

The disappointment of the association’s hopes for additional powers to cover the 10% funding gap came as it claimed the extra £100m announced earlier in the day would not be sufficient to limit new council tax payers’ exposure to 8.5% of the total bill, as stipulated by the government. Sources claimed that even with the extra funding, there would still be a £100m shortfall.

During the Lords debate the one year transitional funding was heavily criticised failing to provide a long term solution to the funding difficulty facing councils and for being made well after councils had begun consulting on schemes with their communities. Lord Tope said the £100m would not solve the problem whereas discretion over the single person discount “would solve the problem that most local authorities are facing”.

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