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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How Facebook and Google are killing papers and transforming news

If journalism is to survive, it needs either to cut costs (read: sack journalists), or build revenues.

When I started work at the Daily Mail in 2005, there was often a discussion among the men who decided the running order of stories about which pages should be printed in black and white. Not all the presses used colour, and God help the unthinking journalist who placed a story about a man painting his entire council house with replica Michelangelos on a page that would end up in “mono”.

That story makes me feel very old (I’m 33), but it highlights the accelerated pace of change in the news industry in the past decade and a half. I also remember the cuttings library, and a time when headlines were written to fit arbitrary spaces on a page, rather than having to be stuffed full of searchable keywords. Those days are gone.

The first newspapers were printed in the 17th century, and the methods of both their creation (movable type) and their distribution (on paper) remained broadly unchanged for three centuries. When Marxism Today’s published its New Times issue in 1988, that system was unravelling. Computers had arrived and the print unions’ insistence on sharply delineated workplace roles was under threat. This had already led to the Wapping dispute of 1986, in which Rupert Murdoch moved his newspapers to new headquarters to break the collective power of the printers. It took 13 months and 1,262 arrests, but it ended with thousands of men in effect accepting that their skills were obsolete.

That trend has merely continued. Today’s journalism students are encouraged to become jacks of all trades – they learn how to make videos, record podcasts and use databases, they master Photoshop, they understand social media and, yes, they even write and edit stories.

On one level, the world of news now seems gloriously open: anyone can start a blog, anyone can publish on the Huffington Post (if you don’t mind not being paid) or Medium, and anyone can build a following on Twitter or Facebook. But there are new barriers to entry. Where many of my older colleagues at the Mail had started work at 16 – often on local papers, because NUJ rules demanded you spend two years there before heading to Fleet Street – young journalists increasingly have postgraduate qualifications as well as degrees. That privileges the middle class and those whose parents live in London, and who can therefore live at home while trying to break in to the industry.

Local newspapers, once the training ground for young reporters, are dying out: there has been a net loss of 198 since 2005, according to the Press Gazette. Their classified adverts have gone online or gone altogether, and some of those titles that remain are consolidated into remote industrial parks, far from the communities they serve. So there is less reporting of court cases and of the petty corruption of councillors (Private Eye’s Rotten Boroughs, which still covers that ground, is never short of material).

In place of independent papers are glossy PR puffs produced by councils. In December, the editor of the Hackney Citizen complained that the local authority was producing its own fortnightly freesheet, Hackney Today. The latter sells advertising space, making it a direct competitor to independent newspapers, and the council pays for 108,000 copies to be printed by Trinity Mirror and distributed to households every fortnight. It is produced by a press office.

National newspapers are also struggling. Print circulations are falling and the returns on display advertising online can be pitiful. Most online adverts are “programmatic”: sold in real-time auctions on a CPM (cost per mille, or thousand clicks) basis. Users hate them for slowing page loads or interrupting their reading. Unsurprisingly, the use of ad-blocking software has risen steadily.

The industry has tried to fight back by expanding the types of adverts it sells. That is why everyone became so excited about video a few years ago: publishers could place an unskippable advert before a video clip and charge pounds, not pennies, using CPM.

The internet-only news organisation BuzzFeed had another strategy: from the start, it didn’t sell display advertising, only “native ads”: what used to be called advertorial. The theory was that users might be irritated by display ads but they wouldn’t object to a pet-food brand sponsoring a heart-warming video about life with a pet. In at least one case, this paid off handsomely – BuzzFeed’s 2015 collaboration with Purina led to a video called Puppyhood, which racked up four million views in two weeks. The challenge is to repeat that winning formula again and again.

Other publishers tried the start-up mantra: build it, scale it fast, hope the revenues turn up at some point. Medium, a cleanly designed blogging platform, was launched by the Twitter co-founder Ev Williams in 2012 and attracted big-name publications and writers. But on 4 January Williams announced that he was “renewing Medium’s focus” by cutting a third of its staff, because it was not financially sustainable. “It’s clear that the broken system is ad-driven media on the internet,” he wrote. “The vast majority of articles, video and other ‘content’ we all consume on a daily basis is paid for – directly or indirectly – by corporations who are funding it in order to advance their goals. And it is measured, amplified and rewarded based on its ability to do that.”

If journalism is to survive, it needs either to cut costs (read: sack journalists), or build revenues. Hence the proliferation of sidelines: conferences, round tables, business-to-business operations, events, sponsored supplements and the rest. Some companies are trying a more direct approach. The heavily loss-making Guardian is investing in a membership scheme, and the radical US magazine Mother Jones has a pledge to fund in-depth reporting. (Individual journalists are trying this, too: the Patreon website offers readers a chance to fund writers directly, at a set cost per month or per piece.)

Of course, someone is making money out of the great flowering of content on the web. Facebook has 1.86 billion monthly users, and in the third quarter of 2016 its net income was $2.38bn, up from $896m a year earlier. Along with Google, it controls two-thirds of the online advertising market. “Facebook is the new town hall,” Mark Zuckerberg told investors. Unfortunately for him, that role in public life is what made Facebook the focus of the row about “fake news” after the US election. For millions of people, Facebook is where they get their news; its editorial decisions and inbuilt biases shape our common understanding of reality.

You might not have to get your words past the print unions any more, but you do have to pander to what Facebook’s and Google’s guiding algorithms deem important. Zuckerberg has more power than anyone who bought ink by the barrel ever did.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 16 February 2017 issue of the New Statesman, The New Times