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Council Tax

Oral Answers to Questions — Deputy Prime Minister – in the House of Commons at 11:30 am on 10th March 2004.

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Photo of John Barrett John Barrett Shadow Minister (International Development), International Development 11:30 am, 10th March 2004

What work his Department has undertaken with the Department for Work and Pensions to help those on low incomes to pay their council tax bills.

Photo of Phil Hope Phil Hope Parliamentary Under-Secretary, Office of the Deputy Prime Minister

The Department for Work and Pensions is primarily responsible for the benefit system and for encouraging council tax benefit take-up. The Office of the Deputy Prime Minister and the DWP work closely together on those issues. A campaign launched last week called "Cut your council tax" is aimed at increasing the take up of council tax benefit.

Photo of John Barrett John Barrett Shadow Minister (International Development), International Development

Council tax payers on low incomes, who include many pensioners, will always be the hardest hit. How long must such people suffer under the present council tax? When will the Government get rid of it and replace it with a tax based on income and ability to pay?

Photo of Phil Hope Phil Hope Parliamentary Under-Secretary, Office of the Deputy Prime Minister

We want to see council tax benefit take-up. We discussed the complexities and the costs of a local income tax last week during the balance of funding review. I must tell the hon. Gentleman that the Liberal Democrat proposal would cost some £2.4 billion, which would impose a massive burden on employers. We are carefully considering all the options, but unlike the Liberal Democrats of today, and the Tories of yesterday with their poll tax, we will not introduce uncosted, unworkable taxes that would affect local government and damage local people.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Does my hon. Friend agree that many pensioners do not know about the improved council tax benefit that is now available? What can we do to make more of them aware of it, so that they can claim the amount to which they are entitled to help them pay their bills?

Photo of Phil Hope Phil Hope Parliamentary Under-Secretary, Office of the Deputy Prime Minister

My hon. Friend is right. Some £800 million in council tax benefit is unclaimed each year; 35 per cent. of pensioners do not claim the benefit to which they are entitled. That is why we have launched the take-up campaign. Rather than whingeing about all the problems, perhaps Opposition Members could join us in urging councils to encourage people—including pensioners on fixed incomes—to claim the benefits to which they are entitled.

Photo of Richard Younger-Ross Richard Younger-Ross Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions

Will the Minister read his own reports? The report by the Chartered Institute of Public Finance and Accountancy estimated that a local income tax would save £350 million. Does the Minister not accept that such a system would be fair, better funded and more equitable?

Photo of Phil Hope Phil Hope Parliamentary Under-Secretary, Office of the Deputy Prime Minister

It is regrettable that, while they may read other people's reports, the Liberal Democrats do not examine their own proposals. Their proposals, including an increase in the tax threshold to £5,000, would cost £2.4 billion. Where will the money come from? It will come from the taxpayer—and the taxpayer will not support uncosted, unworkable Liberal Democrat proposals.