Bedroom Tax v Mansion Subsidy
Under current legal arrangements Councils are obliged to allow a discount on council tax for people living alone, whatever the size of house they live in. At the Cheshire East Council meeting on Thursday 10th April 2014, Labour councillors supported a proposal by the Local Government Association to consider removing council tax discounts for single people living in houses above average size (band E and above). Councillors highlighted the inconsistency between the treatment of the wealthy and those on benefits; single people living in large houses receive council tax discounts, whereas the bedroom tax penalises families on benefits who have a spare room.
At a time of increasing austerity and pressure on council finances, all discounts and subsidies given by the council should be re-examined. The single person discount for people living in mansions is hard to justify.
Cllr Michelle Sherratt, Labour Councillor for Crewe West, said, “I support the debate on removing the discount for removing the single person rebate for persons living alone in properties band E and over.
This “Bridget Jones” council tax discount currently costs councils all over the UK £200m per year in lost council tax revenue and, when there is a dire shortage of housing, it is difficult to justify discounts for wealthy professionals living in these large homes, while in our communities there are low-income families struggling to make ends meet, who are having their discounts cut and are adversely impacted by the bedroom tax on top.”
Cllr Sam Corcoran, Labour Cllr for Sandbach Heath & East, said, “Last year Cheshire East Council implemented the removal of council tax exemptions on empty properties.
This simplified the system, raised over £2m, and most importantly helped reduce the number of empty properties in Cheshire East by over 11%.
Removing the single person discount on large properties would further simplify the council tax system, raise extra funds for the council (estimated extra revenue at £1.5m; the number of people affected 3645), and also encourage people living alone in large houses to move into smaller ones, thereby freeing up larger houses for families who need them."
“The spare room subsidy or bedroom tax sought to encourage people in houses that are larger than they need to move into smaller properties. However, for wealthy bachelors, the Council does the reverse by allowing single persons in big houses a rates discount, giving them an incentive to stay in large properties. We have a bedroom tax for the disabled and a mansion subsidy for the wealthy. That is inconsistent. A single person in a mansion or even in an above average sized house should not receive a subsidy and should not get a rates discount.”
“The proposal is to give councils the freedom to remove the discount, not dictating that they must remove it. I do believe in subsidiarity and giving councils more autonomy. Cheshire East Council should be allowed to decide whether to remove the discount or not and indeed what bands the discount could be removed from. The proposal is to support the Local Government Association campaign, so the cost to the Council of passing this motion is NIL.”