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Benn stands firm on council tax discounts

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A last-ditch attempt by Labour council leaders to convince their party’s leadership to grant councils more flexibility over council tax discounts has ended in failure after the party once again ordered peers to vote against an LGA-backed amendment to legislation.

Council leaders who want to be able to vary the discount that single people receive on their council tax bills met with shadow communities secretary Hilary Benn last week in a bid to convince him to endorse the LGA’s call for flexibility.

However, peers have again been a three-line whip to vote against an LGA amendment to the Local Government Finance Bill, which received its third reading in the House of Lords on Monday evening, leaving council leaders describing shadow ministers’ stance as “frustrating”. The amendment was defeated by 299 votes to 64.

The new amendment to the bill would have allowed councils to reduce single persons discount from 25% to 20%, a move which the LGA believed would allow councils to reduce the burden on the vulnerable and poor of a 10% cut in council tax benefit funding.

Lord Tope, the Liberal Democrat peer tabling the LGA-drafted amendment, said the Labour leadership’s position was “a disappointment for all of us, not least a lot of Labour peers” who were “under heavy pressure”, he said. “We are at the very last stage. This is the last opportunity to do anything to make it a little less bad for those who will be hit hardest.”

Following last week’s meeting, one Labour council leader who did not want to be named said shadow ministers were “quite nervous” that communities secretary Eric Pickles would use any sign that the party supported changing the single persons discount as an opportunity “to say that Labour are proposing a ‘widow’s tax’ or a tax on single people”.

The leader added: “It is so frustrating. All we want is a cross party consensus and to fight back. Pickles is going to throw all sorts over the next few years so what does it matter? We need to stick to the principle of localisation and flexibility.”

Frontbench Labour peer Sir Jeremy Beecham said the party was opposed to the principle of localisation of council tax benefit but he admitted “it is not a very happy situation” to vote against an amendment supported by Labour council leaders. Another Labour peer who did not want to be named said he would vote against the amendment “with gritted teeth”.

The proposal marks the second attempt by the LGA to gain some additional flexibility for councils designing their individual council tax benefit schemes after Labour whips instructed the party’s peers to vote against an LGA amendment tabled during last week’s second reading in the House of Lords.

The more recent amendment addresses some of the concerns cited by Labour peers last week with discount reductions limited to 20% and pensioners exempt from any change, but the restricted flexibility of the second amendment failed to reassure the Labour party’s concerns.

LGA Labour group leader David Sparks said: “Labour local government is in favour of anything that gives greater flexibility to reduce the impact of the government’s cuts. But we must not lose sight of the fact that this amendment is a small detail in the overall scheme of things. The freedom to apply the government’s cuts is not real freedom. Labour local government and the Labour front bench are united in their opposition to this bill.”

Labour peers did secure an amendment which requires the government to review within three years whether council tax support schemes should be combined with Universal Credit. However, the move dismayed some with the LGA, including Conservative group leader Gary Porter who said such a review would be “a disaster” for local government.

LGA chairman Sir Merrick Cockell said it was “disappointing that a common sense compromise” giving councils more flexibility had not been adopted and expressed frustration about the successful Labour amendment calling for a three year review warning it could damage councils’ financial position.

“This has taken a bad situation and made it worse. Putting council tax support into Universal Credit would effectively make paying council tax optional for hundreds of thousands of people who will be struggling with their rent and fuel bills. This would likely have a huge impact on councils’ ability to collect the tax which would have a knock-on effect on public services.”

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