Those who are interested in IDS' welfare reforms might remember that one of the flies in the ointment is that Council Tax Benefit is not being rolled into the Universal Credit (although that had originally been the plan).
The much vaunted 'maximum withdrawal rate' of 65% is a nonsense of course; if you're earning anywhere near enough to live on, your marginal rate is 76%. If Council Tax Benefit remains in its present from, the marginal rate goes up to 81%. Anyway, on with the show...
From Local Gov:
Council tax benefit is due to be cut by £480m by 2013 (1), with rules to be set by local authorities in the future, as part of the DCLG's on-going localism agenda (2).
If Mr Pickles wins the argument, universal credit could dovetail with other council tax benefit systems, potentially leaving some claimants still paying the theoretical 90% tax rate (3), which Mr Duncan Smith is seeking to abolish by guaranteeing workers £3.50 for every £10 they earn (4) ...
A spokesperson for the DCLG said: 'The Government remains committed to localising Council Tax Benefit from 2013-14 (5), and reducing its costs by 10 per cent (6). Full consultation on the system of local council tax rebate schemes will be undertaken in due course. This reform is part of the decentralisation agenda. It will create stronger incentives for councils to get people back into work (7) and so support the positive work incentives that will be introduced through the Government’s plans on Universal Credit.'(8)
1) Excellent. Let's scrap the benefit entirely and just reduce Council Tax in Bands A and B accordingly (most claimants live in Band A or Band B homes anyway). That simplifies things and reduces the high marginal rate problem.
2) Aka 'NIMBY Agenda'.
3) I don't think there will be a 90% tax/withdrawal rate, unless a local council decides to have a withdrawal rate of 50%. If the rules are unchanged, the rate will be around 81% (which to be fair is a tad better than the 100% rates that exist under current rules).
4) IDS is lying here, it would be correct to say 'guaranteeing £1.90 for every £10 they earn'.
5) Why? Any reason why? Council Tax is a national tax so why can't the rules on rebates be set nationally?
6) See my bullet 1).
7) Maybe so, but it will weaken incentives for people to 'get back into work' so is worse than self-defeating.
8) It won't 'support the positive work incentives', it will 'completely undermine' them you f***ing idiots.
Sounds as if he's been reassured
7 hours ago
8 comments:
Council tax is a local tax with varying rates depending on where you live. How do you come to the view its national...genuinely interested
Either way, it's going to be a fun summer. The next quarter is shaping up nicely.
Anon, of course C Tax is a national tax...
1. They are based on one GB-wide law.
2. Valuations were caried out GB-wide on a certain day according to national guidelines.
3. The amount that each council has to raise in C Tax is decided by central government, as it is a balancing figure between what central government tells them to spend and how much other grants central government give them.
4. C Tax Benefit is based on nationwide rules according to some other nationally binding law.
It appears that there is a certain amount of job-justification going on at Job Centres, with certain unemployed people being called in for "interviews" and to "update their CV" two or three times a week. Perhaps they are afraid that with a simpler benefit system, fewer Job Centre staff will be needed.
B, that's yet another advantage of the Citizen's Income-type welfare scheme. Or a disadvantage from the point of view of civil servants.
"4) IDS is lying here, it would be correct to say 'guaranteeing £1.90 for every £10 they earn'."
Or to put it another way.
Would you clean toilets for £1.12 an hour?
SW: "Would you clean toilets for £1.12 an hour?" Nope. But luckily employers know plenty of immigrants who would.
PS, my first jobs in a cafe and at a printers were for £1 an hour (but that's 25 years ago!).
Well WAY back then I was a newborn baby but pay for low skilled work hasn't vastly improved over time. My first jobs was McDonalds at £3.85/hour 7 years ago but I was also getting EMA at £30 a week which paid for drinkies quite nicely (I support the EMA cuts by the way for precisely this reason, it's spent on booze not college)
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