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10 April 2013

How the coalition is repeating Thatcher’s biggest mistake: the poll tax

Like the poll tax, the decision to cut council tax support by 10 per cent will force the poorest households to pay the local charge regardless of their income.

By George Eaton

One of the unambiguous conclusions from the polling carried out since Margaret Thatcher’s death is that her biggest mistake was the poll tax. Forty four per cent of those polled by YouGov for today’s Sun select it as her greatest failure (more than for any other policy), while a Guardian/ICM survey found that 70 per cent believed it didn’t work, compared to just 14 per cent who said it did (again, the worst rating received by any of her policies).

All of which makes it even more surprising that the coalition has chosen to effectively reintroduce it. The decision to cut council tax support by 10 per cent will force many of the poorest households to pay the monthly charge for the first time, regardless of their income. A report by the Joseph Rowntree Foundation found that 1.9 million families who do not currently pay council tax will be billed an average of £140 a year, while an additional 150,000 low income families will pay an average of £300 more. 

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. 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.

By devolving council tax support (Council Tax Benefit, which 5.9 million households receive, is currently administered by central government) and requiring local authorities to design their own schemes, ministers are hoping to avoid receiving the blame for the tax rises. Their luck may well hold. But more than any other austerity measure, “Poll Tax II” has the potential to cause a mass revolt. 

 

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