Govt plans a £420m council tax hike on poorest


by Don Paskini    
1:56 pm - September 18th 2012

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For the past few years, the Liberal Democrats have been running a campaign about council tax called ‘Axe the Tax’. They argue that it ‘is an unfair tax, based simply on outdated valuations of property and with no link to ability to pay. It should be scrapped and replaced with a system based on people’s ability to pay.’

Conservative politicians also argued that rising council tax bills are unfair and ‘immoral’.

So now that the Conservatives and Liberal Democrats are in government together, how’s that campaign against the council tax going?

A new report published recently by the New Policy Institute found that the government’s plans to abolish Council Tax Benefit and require local councils to develop their own systems for support will lead to a £420 million increase in the amount of council tax paid by people on low incomes.

The report also found that:

“Three quarters of the councils we have looked at propose to start taxing low income, working-age households who up till now, thanks to Council Tax Benefit, have had a zero liability.

This is a return to one of the key principles of the poll tax, that everybody (now everybody of working-age) should pay something in tax to their local council. 20 per cent of their normal liability is the most favoured figure today. That’s what it was under the poll tax.

The reason why councils are doing this is that the money they receive from central government to finance the new scheme is 10 per cent less than they were getting under CTB…

Charging the poorest something is not the only proposal: we identify eight others including counting child maintenance and benefits as income, which would exclusively hit families, and introducing band ‘band caps’, which would badly impact families in London and the south east. There are also proposals that damage work incentives, flying in the face of another objective of Universal Credit.”

So here’s a quick guide:

When the Lib Dems said that they wanted to ‘abolish’ council tax, ‘lift the poor out of tax’ and ‘replace it with a system based on people’s ability to pay’, they decided instead to ‘extend it to include more people who can’t afford to pay it’.

When the Tories argued that higher council tax was ‘immoral’, they decided to ‘make it more like the Poll Tax’, and when they wanted to ‘simplify the benefits system and make work pay’, they decided to ‘replace one national system with 350 different local ones which damage incentives to work’.

And when Eric Pickles said ‘council tax rises are a kick in the teeth for hard-working, decent taxpayers’, he meant to add ‘and kicking the poor in the teeth is one of the key objectives for our government’.

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About the author
Don Paskini is deputy-editor of LC. He also blogs at donpaskini. He is on twitter as @donpaskini
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Reader comments


1. Chaise Guevara

“Charging the poorest something is not the only proposal: we identify eight others including counting child maintenance and benefits as income, which would exclusively hit families”

Um, only because those benefits are exclusively given to families in the first place.

Counting benefits as income for tax reasons sounds like a bad idea to me. But as a non-family chap, I find this use of “family” to mean “people who deserve special treatment” to be very annoying.

Well the more we have to spend to keep politicians: Parish, District, County, National and European in the manner to which they and their lackeys have been accustomed, the less we have to spend on food, heating,lighting, transport, oh and that much important High Street.

It is also being devolved to the other nations with a cut applied first.

In Scotland, they are bridging the gap to ensure the level of CT benefit remains the same for another couple of years. the aim being that Scotland will simply devise a new system of LA finance, and the time delay will ensure the new systems will be in place.

In Wales, the labour government have decided not to bridge the gap. But with less than 8 months to go until CT benefit is devolved, they have yet to announce how they intend to replace it – let alone told local authorities and begin to update IT systems etc.

Instead labour ministers have told charities raising concerns over this that their repsonse will be to blame the tories.

So the labour party doesn’t come out of this saga with flying marks either. And you lot are still wondering why Salmond is popular…..

I thought if you couldn’t pay it was paid for you?

@2Barry J

As a parish councillor I’m used to giving my time, four meetings a month plus bits and pieces, for nothing. Lucky me!

You fucking idiot.

“I thought if you couldn’t pay it was paid for you?”

No. You have to pay it. But people in some circumstances get council tax benefit so that they can pay themselves – in some cases this will be 100% of what they have to pay, in other cases it will be less.

What is happening is that central government cut the overall budget for CT benefit by 10%. But rather than decide how to administer the cut, they have passed the buck to local authorities (which is political speak for ‘i don’t know what the fuck to do so I will let somebody even more useless than me decide) and the devolved governments to decide how to change the existing scheme to fit within the new budget.

Whoa, I thought the Lib Dems were all about taking ‘the poor’ out of tax. Yet, here we are after raising the threshold of income tax by a few quid a week, the poor will have to fund that with a massive hike in their council tax.

So how much did it cost to raise the income tax threshold?
How much went to the poor? (define as you will)
how much will the poor need to shell out to fund this gap?

as a non-family chap, I find this use of “family” to mean “people who deserve special treatment” to be very annoying.

Special treatment for children dependent on adults for food and shelter?

Oh, the horror!

9. Chaise Guevara

@ 8 BenM

“Special treatment for children dependent on adults for food and shelter?

Oh, the horror!”

Strawman attacks in place of an actual argument?

Childish!

10. Chaise Guevara

@ Ben M

If you’re actually prepared to talk about this sensibly, my points are as follows:

1)Saying something that reduces what you get in child benefits “would exclusively hit families” is debateably accurate, but misleading, because it sounds like an attack on families when in fact it’s the removal of a special privilege (a privilege I approve of, incidentally).

As a reductio ad absurdum, imagine we had a system where white people got given £50pcm for being white. Then, when someone tried to remove this system, people said “It’s racist! It only hits white people!” Doesn’t ring true, does it?

[I also resent the use of the word "family" to exclusively mean "people with children", but that's not important.]

2) We have a long history of using “family” as a byword for “good” in English politics. If something can be described as being “great for families”, in a lot of people’s eyes this makes it a good thing. This is obviously stupid; I could justify almost anything as being “great for families” if I tried hard enough. It’s a dog-whistle, in other words, like “traditional” or “British”. A thought-terminating cliche.

You can take issue with either of those points if you like. But if you’re going to keep lying and claiming that I’m against child benefits, I’ll ignore you as a time-waster.

Hell yes. Cambridge City Council have just launched a ‘consultation’ on how they’ll handle cutting Council Tax Benefit, and funding the shortfall.

Included in the ideas are using Council Tax as a punitive measure on the unemployed to try to force them to look for work. Also punitive measures for landlords who leave properties empty. Local Government, and Cambridge is a Labour/Lib Dem council, are catching the ‘moral arbiter’ bug from Mr Cameron it seems. They are not simply in the business of collecting and spending taxes, but now want to interfere in the lives of people who don’t fit their moral norms.

They are abolishing council tax benefit in England, and devolving it to Wales and Scotland. As planeshift says above, the Labour government in Wales has refused to bridge the 10% deficit in income which means the full effect of the cuts will be felt here. In Scotland the SNP government has covered the full deficit so there will be no reduction in council tax benefit at all. This is a huge shame in Wales, while we also oppose what the Tories and Lib Dems are doing but Labour isn’t a viable alternative. It’s also likely that if and when Labour returns to power in Westminster they will not restore these benefits in England.

13. Robin Levett

@CG #10:

As a reductio ad absurdum, imagine we had a system where white people got given £50pcm for being white

But being white doesn’t cost extra; having children does. The effect of counting child benefits (broadly speaking) as income without increasing those benefits to take account of the CT proportion payable is to give the parents the choice between feeding/clothing/housing their children, or paying the CT. Unless, that is, you take the view that those benefits are currently more than is necessary to cover those essentials.

14. Chaise Guevara

@ 13 Robin

As I pointed out, it’s a reductio ad absurdum. Therefore not a direct analogy.

The point is that, if Group A gets more benefits under the rules than Group B (regardless of whether that’s fair), it’s always possible to claim that an attempt to equalise said benefits is “an attack on Group A”. But normally misleading.

Similarly, you could describe gender equality legislation as an “attack on men” as it would make it harder for men to get work, even though it only did so by removing an unfair advantage over women. See?


Reactions: Twitter, blogs
  1. Zygon Curry

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/jlYkhYjw via @libcon

  2. s cullen

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/jlYkhYjw via @libcon

  3. kathT

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/jlYkhYjw via @libcon

  4. Tim Swift

    Govt plans a £420m council tax hike on poorest http://t.co/NNBnfKA6

  5. paulstpancras

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/vafHTkQi via @libcon

  6. Tim Easton

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/vafHTkQi via @libcon

  7. Kristofer Keane

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/vafHTkQi via @libcon

  8. Ricky Stafford

    Another Lib Dem U-turn, this time on council tax. £420 million increase on the low paid: http://t.co/H9dpmlX9

  9. Michael Bater

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/tE1otxjY via @libcon

  10. madmaps

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/tE1otxjY via @libcon

  11. Simon Watkins

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/tE1otxjY via @libcon

  12. Alex Braithwaite

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/gK69Ajw2 via @libcon

  13. Carole Bonner

    RT @libcon: Govt plans a £420m council tax hike on poorest http://t.co/tKyKQiWE

  14. Silas Dogood

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/gK69Ajw2 via @libcon

  15. alan cocks

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/gK69Ajw2 via @libcon

  16. toby

    Great news eh?! “@labour52rose: Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/f4nF4fCb via @libcon”

  17. toby

    When is ENOUGH??? “@labour52rose: Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/f4nF4fCb via @libcon”

  18. pissedatgov

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/gK69Ajw2 via @libcon

  19. Peter Waud

    Great news eh?! “@labour52rose: Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/f4nF4fCb via @libcon”

  20. Should the Lib Dems become ‘radical liberals’? | Liberal Conspiracy

    [...] This policy platform is not all bad, but it suffers from two fatal flaws. The first is that many of the people who might be attracted to it will note that it doesn’t correspond very well with what the Liberal Democrats have been doing in power. Their ‘obsession’ with lower taxes for ordinary people, for example, has involved putting up VAT and council tax. [...]

  21. Carolynne Coulson

    Govt plans a £420m council tax hike on poorest | Liberal Conspiracy http://t.co/wswCv9en via @libcon





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