The Spirit of Christmas or the spirit of Scrooge? Labour plan to tax severely disabled in Newcastle challenged

December 21, 2015 3:15 PM


Opposition Liberal Democrat councillors have fired a broadside at Labour controlled Newcastle City Council's pre-Christmas admission that it is planning to remove council tax exemption from thousands of severely disabled people in the city early next year, contrary to its claims to protect the most vulnerable.
At present, 5,400 severely disabled people in the city receive a 100% reduction on council tax, but Labour leaders plan to scrap this in the New Year in reforms to its Council Tax Reduction scheme, under which local authorities determine how best to allocate council tax benefit funding to reduce the burden on people of limited means.
Previously, council tax benefit was administered on a national basis, but changes in recent years mean that each local authority has discretion on how it should be set locally, meaning that the decision to target severely disabled people was taken by the council's leadership.
Lib Dem councillors claims that by raising the effective council tax rate from zero to 15% for severely disabled people, the council is punishing this group to fund a tax break by reducing "disregarded" income for council tax benefit purposes for the least well off from 20% to 15%, an average saving for 13,400 persons of 99p per week.
The council is being asked to agree the change at the January 6th meeting of the city council, but it is understood the Lib Dem Opposition group will be tabling a costed amendment proposal which if supported by a majority of councillors would block the plan.
Cllr Greg Stone, Lib Dem councillor for North Heaton said:
"I became aware of this proposal when a distraught constituent who is severely disabled contacted me after receiving a letter from the council informing her that her exemption would be removed and she would be liable to pay a contribution of up to 15% in 2016. This is a lot of money to people who are unable to work and reliant on Disability Living Allowance and Personal Independence Payments as a fixed income.
"Frankly, it is indefensible of the council to single out the severely disabled for what is in real terms a hefty tax increase. The Opposition have identified alternative proposals which would keep the council tax disregard at its current level of 20% - as introduced by Labour two years ago - and use the money saved to keep the 100% exemption in place for the severely disabled. We will be challenging Labour councillors to do the right thing - keep the 20% level they introduced, and keep the exemption for the severely disabled."
"We recognise that the council has sustained additional financial pressure from Government cuts, but the choice of how to allocate the council tax benefit funding entirely rests with the Labour council leadership. These changes are financially unnecessary - they have deliberately chosen to remove protection from severely disabled people to give £1 a week to another group, and I find that cynical in the extreme. The council can no longer credibly claim to be protecting the most vulnerable in society if it goes ahead with this change. Labour councillors will need to justify their vote on this issue to their disabled constituents."
Factfile :
Currently 13400 people on low incomes qualify for council tax benefit, based on a 20% disregard level. Labour's planned changes will see this group get additional help through a reduction of the "disregard" from 20% to 15%. We estimate this equates to at least £689,832 per year based on an average saving of 99p a week for Band A taxpayers, but probably higher as some recipients will be in higher council tax bands.
5,400 people currently qualify for severe disability exemption from council tax, but under Labour's planned charges will in future be treated in the same way as others on low incomes, and will be subject to the 15% disregard level. We are told by the council that the cost of maintaining this protection will be £632,613 - equivalent to an extra £2.26 per week for disabled persons.

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Subsequently, Cllr Greg Stone has written to the Journal newspaper :
Further to the Journal's coverage of my campaign to protect the council tax exemption for 5400 severely disabled residents of the city, which is very much appreciated, I feel I should correct an important misapprehension that crept into your editorial (23.12.15).
Although it suits the agenda of the city council's Labour leadership to perpetuate the myth that this decision has been somehow forced on the council by Government cuts, it is very important to be clear that this proposal entirely originates from the administration at the Civic Centre and not from national government. The council receives £16m a year in council tax reduction support grant for vulnerable people, and has discretion to target this as it sees fit.
I am happy to accept the point that funding has been reduced and there is not sufficient funding to provide help for every working age individual on a low income (although pensioners are already exempt), but to imply that this decision has been forced on Newcastle by funding cuts is simply incorrect.
The Lib Dem Opposition group's analysis of the council's proposed support scheme shows very clearly that there is more than sufficient funding available to maintain the existing support arrangements for those on the lowest incomes by keeping the 20% "disregard" level introduced by the Labour council administration two years ago. We consider it is therefore unnecessary to change the scheme.
However, Labour have made a deliberate decision to play off one vulnerable group against another by removing protection from the severely disabled to give a bigger tax break to others on low incomes - and in my view, they are very cynically trying to blame this on the Government rather than accept responsibility for their own policy.
I hope the Journal will continue to cover this campaign ahead of the council's decision on January 6th. The Lib Dem Opposition will continue to speak up for the interests of severely disabled residents and local disability organisations and will oppose the council's plan. I hope Journal readers will not be taken in by mendacious Labour attempts to deflect blame for a very shabby proposal. If it is passed on the 6th, the Labour council administration will no longer be able to claim to be protecting the most vulnerable residents of the city.
Yours sincerely
Cllr Greg Stone
Liberal Democrat, North Heaton