Sunday, February 06, 2022
Government response to cost-of-living crisis is blunt and flawed
Of all the measures the Chancellor of the Exchequer might have chosen to help people cope with soaring fuel bills, the idea of paying a £200 repayable grant on council tax bills must rate as one of the worse.
Already, the Guardian is pointing out that tenants in England whose rent includes council tax, or who live in homes in a council tax band above D, are among those who could miss out on the £150 grant announced by the government last week to reduce the sting of sharply rising energy bills:
Sunak said every household would get a one-off repayable £200 discount on their bills in October and a rebate on council tax. However, charities and thinktanks have raised concerns that using council tax as a means to reduce the rising cost of energy is inefficient and unfair, particularly for those who do not own their own homes.
The Labour and Cooperative MP Dame Meg Hillier described the plan as policymaking “on the hoof”, saying that while using council tax to distribute money looked simple, the reality was a lot more complicated.
“The housing situation isn’t as simple as Whitehall thinks it is,” said Hillier, the MP for Hackney South and Shoreditch in east London. “I have a lot of HMOs [houses in multiple occupation] in my constituency. If the landlord pays [the council tax], do they then take it off the tenants’ rent?
“They’re using the council tax account as a way of getting money to people, so if you’re not paying council tax directly or don’t have an account, presumably you are not getting any money.”
Hillier suggested the government package was not “going to touch the sides” for struggling households. “People will still be having to make hard choices.” They were already shopping around to save money on a pint of milk, she said: “If that is the margin you are working on, £150 off a near £700 rise in energy bills is not going to cut it.”
The Resolution Foundation also criticised the plan to distribute money via the council tax system. It said 640,000 households in England in the bottom 30% based on income lived in properties rated E and above. It would also be hard to get the cash to the 25% of households who did not pay their council tax by direct debit, the thinktank suggested.
About a quarter, or 4.4 million, of households in England live in private rented accommodation, according to the English Housing Survey. The figure for the UKas a whole is approximately 5 million. The Treasury says that 95% of renters are in band A to D properties.
The Joseph Rowntree Foundation said energy bills were a big area of uncertainty for private renters and nearly a fifth were already in arrears.
“For renters or sharers whose bills are included in their rent, the benefit of the rebate and loans won’t come to them and some landlords may still increase rents to make up any shortfall,” said Darren Baxter, the charity’s housing policy and partnerships manager.
Other groups, such as students, who are exempt from paying council tax, have also complained about being ignored. Hillary Gyebi-Ababio, the NUS vice-president, said Sunak had “ghosted” students. “Students are already under extreme financial pressure,” she said, adding that thousands of them were using food banks.
In Wales the Welsh Government will be using its £175m Barnett consequential to devise its own scheme. Let's hope it is better targetted at those who need the assistance the most, and uses a more effective delivery method.
Already, the Guardian is pointing out that tenants in England whose rent includes council tax, or who live in homes in a council tax band above D, are among those who could miss out on the £150 grant announced by the government last week to reduce the sting of sharply rising energy bills:
Sunak said every household would get a one-off repayable £200 discount on their bills in October and a rebate on council tax. However, charities and thinktanks have raised concerns that using council tax as a means to reduce the rising cost of energy is inefficient and unfair, particularly for those who do not own their own homes.
The Labour and Cooperative MP Dame Meg Hillier described the plan as policymaking “on the hoof”, saying that while using council tax to distribute money looked simple, the reality was a lot more complicated.
“The housing situation isn’t as simple as Whitehall thinks it is,” said Hillier, the MP for Hackney South and Shoreditch in east London. “I have a lot of HMOs [houses in multiple occupation] in my constituency. If the landlord pays [the council tax], do they then take it off the tenants’ rent?
“They’re using the council tax account as a way of getting money to people, so if you’re not paying council tax directly or don’t have an account, presumably you are not getting any money.”
Hillier suggested the government package was not “going to touch the sides” for struggling households. “People will still be having to make hard choices.” They were already shopping around to save money on a pint of milk, she said: “If that is the margin you are working on, £150 off a near £700 rise in energy bills is not going to cut it.”
The Resolution Foundation also criticised the plan to distribute money via the council tax system. It said 640,000 households in England in the bottom 30% based on income lived in properties rated E and above. It would also be hard to get the cash to the 25% of households who did not pay their council tax by direct debit, the thinktank suggested.
About a quarter, or 4.4 million, of households in England live in private rented accommodation, according to the English Housing Survey. The figure for the UKas a whole is approximately 5 million. The Treasury says that 95% of renters are in band A to D properties.
The Joseph Rowntree Foundation said energy bills were a big area of uncertainty for private renters and nearly a fifth were already in arrears.
“For renters or sharers whose bills are included in their rent, the benefit of the rebate and loans won’t come to them and some landlords may still increase rents to make up any shortfall,” said Darren Baxter, the charity’s housing policy and partnerships manager.
Other groups, such as students, who are exempt from paying council tax, have also complained about being ignored. Hillary Gyebi-Ababio, the NUS vice-president, said Sunak had “ghosted” students. “Students are already under extreme financial pressure,” she said, adding that thousands of them were using food banks.
In Wales the Welsh Government will be using its £175m Barnett consequential to devise its own scheme. Let's hope it is better targetted at those who need the assistance the most, and uses a more effective delivery method.
