ConDem’s Council Tax Blitz on Poor : ‘The wrong reform – at the worst possible time’

Independent

 

A protest in Trafalgar Square in 1990 against the poll tax. Photograph: PA
A protest in Trafalgar Square in 1990 against the poll tax. Photograph: PA

 

GAVIN KELLY Wednesday 30 January 2013

Britain’s poorest households – already struggling to cope with falling wages, rising living costs, and a series of cuts to tax credits and benefits – are about to receive another blow. And very few of them know it’s coming.

Within weeks they will receive an unexpected council tax bill in the post. Many will assume it is a mistake.  Not surprisingly those providing debt advice, as well local MPs, are bracing themselves for a surge of concern and complaint.

The reason for this is an impending change to council tax benefit.  The Government is cutting the amount spent on helping those on the lowest incomes by 10% at the same time as it is transferring responsibility for administering support to local councils.

Centrally-set rules mean that councils will protect all pensioners leaving them with a stark choice: either substantially increase the bills of the working-age poor who currently receive council tax benefit or find the savings elsewhere from already shrinking budgets. In political terms it amounts to the decentralisation of blame and pain.

Today’s Resolution Foundation [pls link] report reveals that faced with this invidious choice three-quarters of English councils are set to introduce less generous systems of council tax support.

Over a third of these are planning to introduce schemes that charge affected households an extra 20% of the total bill.

Harsher still, many councils will for the first time include child benefit in their calculations of a family’s income, meaning that those with children will face the biggest hikes.

Only around a quarter of English councils feel able to absorb the funding shortfall within other budgets as the Scottish and Welsh administrations are doing. 

It is a policy with few redeeming features. 

It is punitive on the poor.

It will be fiendishly complex, hard to administer and end up in hard-pressed councils chasing non-payment from some of the poorest households in the land.

It’s also likely to result in significantly larger bills in 2014 than this year. And, perhaps most surprisingly, it undermines the goal of universal credit – the Government’s own flagship welfare reform – by increasing the effective tax rates of those on low pay.

If recent history has taught Whitehall anything, it is to tread very carefully when it comes to introducing local property taxes on the poor. 

There are other ways for the Government to find the savings it is seeking:  our regressive system of council tax is ripe for a new top band raising revenue from the most expensive properties.

This is the wrong reform made at the worst of times.

Gavin Kelly is chief executive of the Resolution Foundation think tank 

 

The Independent

 

 

 

 

Comments
  • Jo Yelland January 31, 2013 at 11:39 am

    Co. Durham council have already tried to warn everyone about this, fair play to them for it too. They have decided to make peopple who have several properties pay full rate council tax and make those with empty properties also pay up, regardless of where they themselves live. That way, most people should see few changes, if any, and the richest members of society (including housing benefit eating landlords) will have to pay their fair share.

  • jeffery davies January 31, 2013 at 1:47 pm

    riots are coming but there again torys dont care 99percent are poor jeff3

  • Serenity January 31, 2013 at 2:58 pm

    Time private landlords who have empty properties while they turn housing benefit tenants away were made to pay instead of being exempt on empty properties and second home owners which sit empty for most of the year.

  • Bluesky January 31, 2013 at 7:48 pm

    when the changes bite, the riots that follow will make the poll tax riots look like a teddy bears picnic. immages if IDC, GO, DC will be burnt all over the land, and they will be cowering in some bolt hole somewhere?? the line has been drawn in the sand and the government are on the wrong side of it…….i think we should take a leaf out the french revolution eg= OFF WITH THEIR HEADS…….

  • Thomas January 31, 2013 at 10:47 pm

    Do this government WANT riots and unrest? If I was in power and deliberately wanting to start mass protests against myself, this is what I’d do. Once people have nothing, they become very dangerous.

  • GEOFF REYNOLDS February 2, 2013 at 12:43 pm

    Shielding money invested in out of reach tax havens, such as the Cayman Islands is one of the number one priorities of the coalition government. All fiscal institutions in the uk are sheltering obscene wealth in these dirty little stashes. There are no principles or morals when it comes to hiding money for no other reason, but to escape taxation.
    Starbucks, Amazon and the like, are visible to the electorate and are used as eye candy to deceive and make out something is being done. This is just an exercise to appease.
    Nobody will ever know the extent of this repulsive disease that eats away at our economy
    while enabling those who fly under the radar to prosper.
    They say power corrupts. Our powers are so corrupted and so bent they would find it hard to hide behind a corkscrew!
    Nonetheless they continue to rob and deceive at every twist and turn. Money is their God.
    Poverty, homelessness and suicide is a price worth paying to fulfill their obsessions.
    What i can not, ever forgive, is the institutions that meter out the ill treatment on behalf of their crazed masters, the likes of the DWP.
    Have the staff no compassion, do they not understand the depths of depravity that is being used against the weakest in our society…..
    Its so easy to hide behind a brown envelope that will bring abject misery to many, but its still you who are pulling the trigger!

  • A Lewis February 2, 2013 at 8:46 pm

    Not sure about the rioting, I live in the sticks and what with travel being expensive these days it’s a bit of a non starter. Reckon if I rioted by myself it wouldn’t have much impact. Think I have a more practical plan. Don’t know if it helps but I think it might be a good idea if we all went to see our GP’s and asked for some happy pills (not the ones that make you suicidal obviously, the other ones). Because I reckon all this dwelling that we’ve been doing, on being poor, is properly getting us down. (Hence the rioting.)

    Like many others, my budget was well beyond a joke even before the council wrote to me asking for their share. Now I give up, it’s pointless even trying to keep up with the bills. The thought of debt though, really gets me down, but I’ve heard, if you get the right tablets you really don’t care about anything. When my application for free prescriptions comes through I’m gonna be down to the Quacks office quick smart for a dose. Wonder if I should book in now? Coz it takes forever these days to get an appointment. I think it’s busier these days because of all those poor people who keep going in to get precriptions to cheer themselves up. Guess if you can’t afford food, a happy pill is an excellent substitute. Yum, yum!

  • jay February 3, 2013 at 12:06 pm

    To show how harsh this new legislation is, here is an example.

    Imagine a middle aged woman or man that has brought up their children on their own, they have now left home leaving two spare bedrooms.

    They receive £71 Job Seekers Allowance. The rent is £100 and paid by housing benefit. From April they will be made to pay £25 towards the rent this leaves them with £46 a week to live on.

    But that is not all from that £46 take off the payment towards the water charge.
    Also then take into account the tv licence, gas and electricity costs and they still have to feed themselves.

    There is no money left to pay anything else!
    Pay council tax and starve would seem to be the council’s recommended option.
    You would need happy pills if faced with this scenario.

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