Council Tax Rebate

– in the House of Commons at 3:34 pm on 31st March 2009.

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Motion for leave to introduce a Bill (Standing Order No. 23)

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Photo of Joan Ryan Joan Ryan Labour, Enfield North 3:38 pm, 31st March 2009

I beg to move,

That leave be given to bring in a Bill to rename council tax benefit council tax rebate;
and for connected purposes.

This Government have a proud record in reducing poverty among pensioners. Since 1997, a raft of measures, including the largest ever increase in the basic state pension, has helped to lift 2 million pensioners out of poverty and means that pensioners are, for the first time in our history, less likely to live in poverty than the working population. Too many of our pensioners, however, including our veterans who have served this country with courage and distinction, still live in poverty, so this is no time to rest on our laurels.

The House will be aware of the valiant campaign led by the Royal British Legion to increase levels of council tax benefit take-up. It has rightly highlighted that for many pensioners, council tax represents a significant outlay—in some cases, it is their largest single expenditure. I am sure that Members of all parties will recognise council tax as one of the most frequently raised issues on the doorstep, particularly among pensioners.

Council tax benefit was introduced to address precisely this issue: to help the most vulnerable members of our society with their council tax bills. But as it stands, as many as 2.2 million eligible pensioners do not claim council tax benefit, even though they are entitled to it. In fact, the level of take-up of council tax benefit has actually fallen by 10 per cent. over the past seven years for which data are available. This means that council tax benefit, which has the highest number of potential claimants, has the lowest take-up level of any state benefit. Nearly half of all pensioners who qualify for council tax benefit do not make a claim, and almost £1.5 billion of council tax benefit—money that has been set aside by the Government to help people pay their council tax bills—goes unclaimed each and every year.

The sum of £1.5 billion may sound like an abstract figure, but in real terms it would mean an additional £598 per year per eligible pensioner to help cover the costs of council tax. As 41 per cent. of pensioners living below the poverty line are entitled to council tax benefit but do not claim it, £598 is a very significant amount. Indeed, in many cases it would be sufficient to lift pensioners out of poverty altogether. A higher take-up rate of a council tax benefit could, therefore, bring about dramatic reductions in the level of pensioner poverty. Just a 10 per cent. increase in take-up would lift 47,000 pensioners out of poverty, and the Royal British Legion believes that as many as 20,000 veterans would be better off if they claimed council tax benefit. That is why the Royal British Legion was able to attract 25,000 signatures to the petition it presented to No. 10 Downing street at the end of February.

The Government accept that current levels of council tax benefit take-up are not good enough, and I welcome the fact that they have made it clear that pensioners are their priority group for increasing take-up. I believe that rebranding council tax benefit as council tax rebate would increase take-up, especially among pensioners, and this is what my Bill seeks to achieve.

For accuracy alone, there is a strong argument that council tax benefit ought to be rebranded as a rebate. Effectively, council tax benefit assesses an individual's liability to pay tax and as such is misnamed at the moment. Using the term "rebate" rather than "benefit" would reflect more accurately council tax benefit's true nature as a reduction in tax liability, rather than a state benefit. There is also evidence to suggest that this simple renaming could encourage higher levels of take-up. Indeed, when my hon. Friend Mr. Woolas appeared before the Communities and Local Government Committee in June 2007 as a local government Minister, the first suggestion he provided for ways to improve council tax benefit take-up was, without being prompted,

"To change the name to something that is not benefit".

In its final report, the Select Committee went on to endorse that sentiment, as its predecessor Committee did in 2004, and as have the Audit Commission and the Lyons inquiry into local government.

In his report, Sir Michael Lyons highlighted that when the old domestic rates regime was in place, the term "rebate" was used instead of the term "benefit". Take-up rates stood at 75 per cent. overall and were around 90 per cent. for older people then, which is substantially higher than the current estimated take-up rate of between 55 and 61 per cent. This discrepancy may, at least in part, be explained with reference to the stigma associated with claiming what are perceived to be benefits, which may deter some eligible pensioners from submitting a claim.

Many older people I meet in Enfield are proud of their independence and do not like asking for help, not least our veterans who fought for the freedoms that we all enjoy. Indeed, a survey conducted by Help the Aged suggested that as many as one in seven pensioners would not undergo means-testing, even if that meant foregoing benefits to which they knew they would be entitled. This is certainly the opinion of the Enfield Borough Over 50s Forum, which, I am pleased to say, supports my Bill. Its chairman, Mr. Monty Meth, told me that the forum—and with more than 3,000 members, it is one of the largest in the country—had

"first hand experience of people refusing to apply for reduced council tax because of the stigma attached to the idea that they are applying for benefits or for charity, when in fact they are claiming a rebate that is rightfully theirs".

Renaming council tax as a rebate would address the stigma associated with the term "claiming benefit" and remove this barrier to take-up. In my experience, older people have far less aversion to claiming back tax than to claiming benefits. The use of the word "rebate" would, therefore, provide pensioners with a greater sense of legitimate entitlement to the relief and, moreover, would be consistent with the second adult rebate, which is already administered by councils and provides a reduction in the council tax bill for some people.

In principle, the Government accept the case for this change. My Bill does not seek to change the rules that govern who is entitled to council tax benefit or to alter the amount of assistance people receive; it is simply about helping to implement a policy that the Government have already introduced. They accept that the take-up level of council tax benefit is too low, that a priority must be increasing the level among pensioners, including among our veterans, and that changing the name of council tax benefit, particularly by removing the word "benefit", would encourage a higher level of take-up, particularly among pensioners.

I do not think that any of the supporters of this Bill, who come from all parts of the House, think that a name change is some sort of panacea, but that is no excuse for inaction. There is no master plan, no one-size-fits-all strategy and no single solution to improving the level of council tax benefit take-up, and if Ministers are waiting for one, I fear that they will be disappointed and, more importantly, thousands of poor pensioners will go without the help to which they are entitled.

Increasing the level of council tax benefit take-up and reducing pensioner poverty, including among veterans, will require a variety of different strategies tied to local needs. That will involve central Government working in partnership with local authorities and using the creativity of voluntary organisations. Given that so many could benefit so much from such a small and straightforward change, I hope that Ministers will listen to the thousands of pensioners, including the 25,000 veterans who added their name to the Royal British Legion's petition, and agree that the case for renaming council tax benefit council tax rebate is compelling.

Question put and agreed to.


That Joan Ryan, Siobhain McDonagh, David Cairns, Jim Dobbin, Bob Russell, Dan Rogerson, and Mr. Nigel Evans present the Bill.

Joan Ryan accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 26 June and to be printed (Bill 82).

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