Poll Tax II: the poorest face council tax rises of up to 333%

A single parent working part-time on the minimum wage could pay £404 more in council tax from this April.

Today's Independent splashes on the "new poll tax" set to hit the poorest households this April but Staggers readers will already be familiar with the story.

In a piece published earlier this month, I warned that the coalition's decision to cut the fund for council tax support (currently know as Council Tax Benefit) by 10 per cent would force millions of low-income families to pay the charge for the first time. Since the government has stipulated that current levels of support must be maintained for pensioners (who, partly owing to their greater propensity to vote, have once again been shielded from austerity), the burden will fall entirely on the working-age poor.

If this sounds a lot like the poll tax, it's because it is. The Community Charge, as it was officially known, similarly required each household, irrespective of its income, to pay at least 20 per cent of the tax. Patrick Jenkin, the architect of the poll tax, has even accused the government of repeating the Thatcher government’s mistake. The Conservative peer told the BBC last year: "The poll tax was introduced with the proposition that everyone should pay something . . .We got it wrong. The same factor will apply here, that there will be large numbers of fairly poor households who have hitherto been protected from Council Tax, who are going to be asked to pay small sums."

Today's important report from the Resolution Foundation (I'd encourage you to read it in full), which Matthew Pennycook wrote about this morning, reveals that the situation is even worse than feared. Of 184 local authorities in Englands, 125 plan to introduce a new or higher payment for those on low incomes from this April. Sixty councils intend to demand a minimum payment of 8.5 per cent of a full council tax bill, while 65 plan to introduce a minimum payment of 20 per cent. As a result, many of the 2.5 million out-of-work claimants who currently pay no council tax face a tax increase of between £96 (£1.80 per week) and £255 a year (£4.90 per week), while an additional 670,000 low-paid working families face an increase of up to to £577 a year.

At present, a single parent working part-time on the minimum wage with children in childcare pays £173 a year in council tax. From April, this could rise to £577 - a 333 per cent increase (see table below). A couple with children and one working adult will see their bills rise by between £96 (a 12 per cent increase) and £304 (a 37 per cent increase). 

Click to enlarge

When the poll tax was introduced in 1989, the poor were at least assured that their benefits would rise with prices. But under George Osborne’s plan to uprate working-age benefits by 1 per cent for each of the next three years, rather than in line with inflation, their incomes will be squeezed to an unprecedented degree. The government’s impact assessment showed that the poorest tenth will lose the most in real terms (2 per cent of net income a week), while the next poorest tenth will lose the most in cash terms (£5 a week).

Those faced with the unpalatable choice of either heating their home or feeding their family are unlikely to accept stoically the first council tax bill that lands on their doormat in April. Figures from the Institute for Fiscal Studies show that the average working family will lose £165 per year, while the average non-working family will lose £215.

Confronted by these losses, which household will willingly pay hundreds of pounds in additional tax? Yet, for the sake of saving just £480m a year, the coalition intends to force councils to chase the poorest through the courts to recoup a charge they cannot afford to pay. 

Confident that they can push the blame onto local authorities, ministers appear untroubled by the dramatic tax rises above. But as the poor unite in mass non-payment, they may yet come to rue their complacency. 

A protest in Trafalgar Square in 1990 against the poll tax.

George Eaton is political editor of the New Statesman.

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Our union backed Brexit, but that doesn't mean scrapping freedom of movement

We can only improve the lives of our members, like those planning stike action at McDonalds, through solidarity.

The campaign to defend and extend free movement – highlighted by the launch of the Labour Campaign for Free Movement this month – is being seen in some circles as a back door strategy to re-run the EU referendum. If that was truly the case, then I don't think Unions like mine (the BFAWU) would be involved, especially as we campaigned to leave the EU ourselves.

In stark contrast to the rhetoric used by many sections of the Leave campaign, our argument wasn’t driven by fear and paranoia about migrant workers. A good number of the BFAWU’s membership is made up of workers not just from the EU, but from all corners of the world. They make a positive contribution to the industry that we represent. These people make a far larger and important contribution to our society and our communities than the wealthy Brexiteers, who sought to do nothing other than de-humanise them, cheered along by a rabid, right-wing press. 

Those who are calling for end to freedom of movement fail to realise that it’s people, rather than land and borders that makes the world we live in. Division works only in the interest of those that want to hold power, control, influence and wealth. Unfortunately, despite a rich history in terms of where division leads us, a good chunk of the UK population still falls for it. We believe that those who live and work here or in other countries should have their skills recognised and enjoy the same rights as those born in that country, including the democratic right to vote. 

Workers born outside of the UK contribute more than £328 million to the UK economy every day. Our NHS depends on their labour in order to keep it running; the leisure and hospitality industries depend on them in order to function; the food industry (including farming to a degree) is often propped up by their work.

The real architects of our misery and hardship reside in Westminster. It is they who introduced legislation designed to allow bosses to act with impunity and pay poverty wages. The only way we can really improve our lives is not as some would have you believe, by blaming other poor workers from other countries, it is through standing together in solidarity. By organising and combining that we become stronger as our fabulous members are showing through their decision to ballot for strike action in McDonalds.

Our members in McDonalds are both born in the UK and outside the UK, and where the bosses have separated groups of workers by pitting certain nationalities against each other, the workers organised have stood together and fought to win change for all, even organising themed social events to welcome each other in the face of the bosses ‘attempts to create divisions in the workplace.

Our union has held the long term view that we should have a planned economy with an ability to own and control the means of production. Our members saw the EU as a gravy train, working in the interests of wealthy elites and industrial scale tax avoidance. They felt that leaving the EU would give the UK the best opportunity to renationalise our key industries and begin a programme of manufacturing on a scale that would allow us to be self-sufficient and independent while enjoying solid trading relationships with other countries. Obviously, a key component in terms of facilitating this is continued freedom of movement.

Many of our members come from communities that voted to leave the EU. They are a reflection of real life that the movers and shakers in both the Leave and Remain campaigns took for granted. We weren’t surprised by the outcome of the EU referendum; after decades of politicians heaping blame on the EU for everything from the shape of fruit to personal hardship, what else could we possibly expect? However, we cannot allow migrant labour to remain as a political football to give succour to the prejudices of the uninformed. Given the same rights and freedoms as UK citizens, foreign workers have the ability to ensure that the UK actually makes a success of Brexit, one that benefits the many, rather than the few.

Ian Hodon is President of the Bakers and Allied Food Workers Union and founding signatory of the Labour Campaign for Free Movement.