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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Keir Starmer MP: Choosing ideological purity before power is a dereliction of duty

The former director of public prosecutions believes getting involved with Brexit negotiations is crucial. 

 

Three weeks after Brexit, Keir Starmer held a public meeting in his London constituency of Holborn and St Pancras. “We had hundreds turning up,” he remembered. “The town hall was absolutely packed - it was standing room only and we had to turn people away. We haven’t had a public meeting of that size for some time.”

When it comes to Brexit, Starmer is an obvious Labour asset. Director of public prosecutions from 2008 to 2013, he has the legal background to properly scrutinise an EU deal. His time spent as a shadow immigration minister means he understands some of the thorniest problems facing negotiators.

But instead, the MP finds himself on the shadow back benches.

“My decision to resign was driven by Jeremy’s decision on the referendum,” he told The Staggers. “I was particularly troubled by his suggestion that we should invoke Article 50 straight away, and start the exit process [Corbyn has since backtracked on this suggestion]. 

“That is not for me a question of left-right politics. When he said that, I felt he was in fundamentally a different place from me in terms of how we fight for the future of our country.”

Starmer is not a man to enjoy life in opposition, and he has little time for airy promises. “Jeremy talks of dealing with inequality and housing projects, and a fairer society - all of which I would agree,” he said. “What I haven’t seen is the emergence of detailed policy that would get us to these places.”

He also gives purists in the party short shrift. “I would reject wholeheartedly any notion of a Labour Party that is not committed to returning to power at the first opportunity,” he said. “Of course that needs to be principled power. But standing on the sidelines looking for the purest ideology is a dereliction of the duty for any Labour member.”

Starmer believes Labour should be joining Scottish and Northern Irish leaders in trying to influence Brexit negotiations. He sees the time before invoking Article 50, the EU exit button, as crucial. 

Nevertheless, the man named after the Scottish founder of Labour, Keir Hardie, is pessimistic about the future of the UK. 

“It is going to be increasingly difficult to resist a further referendum in Scotland,” he said. “It will be increasingly difficult to keep Scotland as a part of the UK. I hope that doesn’t happen, but everyone knows David Cameron has put that at risk.”

Starmer may be a London MP, but he follows events in the rest of the country closely. While still in his shadow cabinet post, he embarked on a countrywide tour to learn more about attitudes to immigration.  

He condemns the increase in racist attacks post-Brexit as “despicable”, but insists there is “a world of difference” between these and genuine concerns about resources. “If you lose your job because there has been an influx of labour from another country, that is a legitimate cause for concern.”

He is equally scathing about the Government’s net migration cap. “If immigration is simply seen as a numbers game, nobody will ever win that debate,” he said. “The question should be: what is it we want to achieve?

“What do we expect of those who are arriving? What is the basic deal?”

In January, Starmer visited the informal camps in Calais and Dunkirk. “What I saw in Calais was appalling,” he said. “It is an hour from London. 

“To see families and children in freezing, squalid conditions without any real hope of a positive outcome was enough to make anybody think: ‘This is not the way to solve the refugee crisis.’”

The new PM, Theresa May, built her reputation on a rigid asylum policy, but Starmer believes a strong opposition can still force change. “If you take the Syrian resettlement scheme, that started life as a scheme for victims of sexual violence,” he said. “When pushed, it became a scheme for 20,000 Syrians but not if they reached Europe. When pushed, the Government accepted the case for some unaccompanied children in Europe to come to this country. 

“Labour needs to keep pushing.”

For now, though, Labour is divided. Starmer has been tipped as a future leader before, in 2015, but declined to run because of a lack of political experience. One year and a Brexit on, he certainly has some of that under his belt. But he rules himself out of the current leadership challenge: “I am 100 per cent behind Owen.” What will he do if Jeremy Corbyn wins? “Let’s cross each bridge when we come to it.”

Starmer is clear, though, that Labour can only win an election if it comes up with a more ambitious project, an economy with purpose. And the Brexit negotiations provide an opportunity. “We have to ask ourselves,” he said. “Do we simply want a series of trade agreements, the more the merrier? Or do we want deals that achieve certain ends? It is a moment to recast the future.”