Proposals to Cap Council Tax Benefit

Communities Secretary has unveiled plans to impose caps on council tax benefit from 2013 which follows the controversy over plans to cap housing benefit which is subject to a current judicial review in the High Court by the Child Poverty Action Group (CPAG). CPAG and other charities warned the housing benefit changes could amount to "social cleansing" and force thousands of poorer people out of expensive areas, such as central London, and increase homelessness. Caps to council tax benefit will only compound the impact and increase poverty.

The caps if they go ahead are projected to save the taxpayer up to £480m a year. Council tax benefit is claimed by 5.8m people and costs £4.8b a year. Under the new plans, the money paid to councils would be cut by 10% and local authorities would be given a pot of money to share amongst those people who need it most. The Government proposes that pensioners will be protected against any reduction in support but the consultation places a greater emphasis on back to work incentives, tackling benefit error and fraud and wider economic reform.

Eric Pickles said: "The new system will be a fairer one, where hard-working families and pensioners are not left to pick up a spiralling benefits bill and where work always pays. Councils will be much better placed to attract new business and industry, better placed to help their residents get off welfare and reap the benefits of work instead. They will directly benefit from improving the prosperity of the local area that will in turn drive down their benefit bill. Local authorities will have much greater freedom to administer rebates in a way that best meets local needs and best supports local people whilst safeguards will be put in place to protect the most vulnerable, including pensioners, from any reduction in the support that is on offer."

So the new system will be a fairer one where work always pays. Mr Pickles seems to be forgetting the thousands of public sector workers who have been made redundant due to local authority spending cuts as a result of budget cuts made by his department. He also seems to be forgetting that as a result of recent funding cuts to charities from local authorities, there may be community and voluntary sector workers at the risk of losing their jobs. And just a few weeks ago, one of his Tory counterparts announced that some disabled people should be able to choose to work for less than the minimum wage if it improved their chances of getting a job.