Low income earners could face Council Tax increase


Photo : Stuart R Brown

Tower Hamlets’s low income residents could face Tax Benefit cuts. Photo : Stuart R Brown

Working age residents on low incomes in Tower Hamlets could potentially have to pay an additional £3 in Council Tax per week, should the Council decide to pass on cuts decided by the government to the residents currently receiving Council Tax Benefit by cutting their Benefit.

Tower Hamlets Council is facing a shortfall of approximately £2.7 million as a result of the government’s welfare reforms that abolished Council Tax Benefit Schemes in April 2013.

The Council is currently running a consultation with residents regarding the implementation of the local scheme for the 2014/2015 financial year.

It will need to decide on whether to pass the cuts to residents currently receiving Council Tax Benefit by cutting their benefit, or by absorbing the extra cost into the Council’s budget.

Tower Hamlets Mayor, Lutfur Rahman said: “Last year, we protected 25,000 residents from Council Tax Benefit cuts at a time when welfare reform began to make the management of finances a real challenge for families.

“We hope to continue this scheme, and keep on offering support to all our residents as wider government cuts carry on biting.”

The Council has absorbed the cost for the 2013/2014 financial year and is proposing a scheme that is broadly based on the scheme provision previously used.

Labour’s Spokesperson for Resources, Councillor Carlo Gibbs, said: “Prices have risen faster than wages in 38 out of the last 39 months yet the Government is intent on further cuts to the most vulnerable in our community. The Council Tax Benefit Scheme offers a welcome reprieve for residents affected but the root problem will not be solved until we have kicked this Tory Government out of Downing Street.

“With the current Mayor storing up an £71m black hole in the Council’s finances it is important that any programme not only has the support of residents but is also financially sustainable.”


We asked Tower Hamlets residents what solution they would choose, between passing down the cuts to low-income earners or absorbing them into the general budget.

Dominic Sin. Pic: Nazim Ahmad

Dominic Sin. Pic: Nazim Ahmad

Dominic Sin, 21, Student, Tower Hamlets

“I think I would prefer if the cuts were passed down to the low-income group. I know that sounds wrong, and mean, but everyone is facing difficulties with all these cuts. It’s time that people step up instead of relying so much on benefits. It would be unfair to the population as a whole if absorbing the cuts were to cause other cuts.

“In the end, the people who are in a bad position could apply for help through other means, but for the middle-income population, help is not readily available, and we surely do not want everyone to get poorer!”


Amin Ghassan. Pic: Nazim Ahmad

Amin Ghassan. Pic: Nazim Ahmad

Amin Ghassan, 26, Sales Assistant, Tower Hamlets

“What difference does it make? Either way, the budget is being cut. So we will all need to pay more tax, or have less benefits. It’s not just people who don’t earn much suffering; everyone are feeling it right now. Still, I’d say to just absorb the cuts. In the end, asking everyone to go through this together is better then just punishing the less able.”

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