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.

Getty
Show Hide image

Donald Trump vs Barack Obama: How the inauguration speeches compared

We compared the two presidents on trade, foreign affairs and climate change – so you (really, really) don't have to.

After watching Donald Trump's inaugural address, what better way to get rid of the last few dregs of hope than by comparing what he said with Barack Obama's address from 2009? 

Both thanked the previous President, with Trump calling the Obamas "magnificent", and pledged to reform Washington, but the comparison ended there. 

Here is what each of them said: 

On American jobs

Obama:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.

Trump:

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

Obama had a plan for growth. Trump just blames the rest of the world...

On global warming

Obama:

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.

Trump:

On the Middle East:

Obama:

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy. 

Trump:

We will re-enforce old alliances and form new ones and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

On “greatness”

Obama:

In reaffirming the greatness of our nation we understand that greatness is never a given. It must be earned.

Trump:

America will start winning again, winning like never before.

 

On trade

Obama:

This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  

Trump:

We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body, and I will never ever let you down.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland