By Lucy Phillips
17 February 2011
Plans to impose a 10% Housing Benefit cut on anyone
unemployed for more than a year have been dropped from the government’s Welfare
Reform Bill, published today.
The U-turn was welcomed by the Chartered Institute of
Housing, which had campaigned against the plans along with other organisations
and charities in the sector. The cut, announced in the June Emergency Budget,
would have affected anyone claiming Jobseekers Allowance for more than 12
months.
Richard Capie, deputy chief executive of the CIH, said:
‘This is an important and welcome concession. Government has recognised that
this is a draconian measure that would have undermined households’ abilities to
pay the rent, regardless of the job market they were living in, or the level of
endeavour they were putting in to find work.’
But he said the sector remained ‘deeply concerned’ about
other aspects of the Welfare Reform Bill. This includes the decision to link
local housing allowance to the Consumer Prices Index, a lower measure of
inflation than the Retail Prices Index, which it is currently tied to.
‘As with the JSA decision, we hope that Parliament and
government in particular will revisit some important aspects of the
legislation, which for all their good intentions, remain deeply flawed and
unsustainable,’ Capie added.
The Bill also includes measures to tackle under-occupancy of
social housing, as well as the introduction of a benefit cap to limit the total
amount a household can receive to about £26,000 a year.
Central to the Bill is the creation of a Universal Credit,
designed to bring all benefits and credits into one payment by 2013 and make
sure people are better off in work than out of it. Details of the new Work
Programme, to be provided by the private and voluntary sectors, are also in the
Bill.
Work and Pensions Secretary Iain Duncan Smith said: ‘Our
reforms will end the absurdity of a system where people too often get rewarded
for doing the wrong thing, and those who strive to do the best by their
families get penalised.’
The Bill would provide a ‘fair deal for the taxpayer’, he
added.
But unions accused the government of ‘manipulating the
benefits system to force people back to work’ at a time of rising unemployment.
Unite
assistant general secretary Gail Cartmail said there was ‘a large degree of
dysfunction’ between ‘Duncan Smith’s desire to make work pay and the hardline
economic and fiscal policies of Chancellor George Osborne, which are designed
to sacrifice jobs in pursuit of the Holy Grail of deficit reduction’.
Under
the reforms, council tax benefit will be replaced by local rebate schemes from
2013, in an attempt to cut the costs by 10%. In a written ministerial statement
laid before the Commons today, Local Government Secretary Eric Pickles said the
coalition ‘remains committed to retaining council tax support for the most
vulnerable people in society’.
He added: ‘Combined with other incentives – such as the New Homes Bonus and our
proposals for the local retention of business rates – these changes will give
councils a greater stake in the economic future of their local area, so
supporting the government’s wider agenda to enable stronger, balanced economic
growth across the country.’
A full consultation on council tax rebate schemes will be undertaken in due
course.
