Council tax benefits

Kiran Stacey

And now for the big story of the day…

A row has been rumbling since the beginning of the year between cabinet ministers Iain Duncan Smith and Eric Pickles about $4.8bn worth of benefits.

To recap: Last year’s spending review decided the government should localise council tax rebates, giving councils the right to cut rebates for poorer residents and use the money instead on tax cuts or service provision. But that could lead some low-earners paying an effective tax rate of 90 per cent, something IDS worries will undermine the incentive to work that he is trying to create through the single universal credit. IDS wants instead to roll council tax benefits into the universal credit so it reflects claimants’ earning status.