The New Poll Tax – Millions will pay more while Millionaires pay less

Next April, when high income earners start to benefit from the Tory–led government’s cut to the 50p tax rate, millions of people with the lowest incomes in the country will receive council tax bills they cannot afford to pay because of the government’s changes to Council tax benefit.

5.9 million low-income households benefit from council tax benefit – more than any other means-tested benefit in the United Kingdom. It was brought in after the Poll Tax as a government subsidy to councils so they would not collect council tax from people who simply could not afford to pay it.

The Tory–led government announced plans to scrap council tax benefit earlier this year. Their plan is simply to cut the funding councils receive by 10% and ask local Councils to develop their own local scheme to collect the Council tax required to make up the difference.

In Islington this is going to have wide repercussions, and over 20,000 local households who currently don’t pay anything, or only pay a small amount will be affected. If the proposals go through, people who receive council tax benefit are likely to have to pay an extra £192 per year. This is a huge amount for low income families who are already facing increasing pressures from other benefit changes, and the rising price of living.

The similarity with the Poll Tax is not just its “Reverse Robin Hood” unfairness. Like the Poll Tax it will be difficult to collect council tax from people who are not used to paying council tax and who will find it difficult to pay.

If the budget didn’t kill off Cameron’s claim that we’re all in this together, then the introduction of his tax cuts for millionaires coming in on the very same day as tax increases for those on low incomes, surely will. Millions will be paying more so that millionaires pay less.

So far opposition to these plans have been wide reaching, and as well as a damning report from the Institute for Fiscal Studies, councils up and down the country have spoken out against the changes. Perhaps most damaging for the Prime Minister were the comments from his own Oxfordshire council, who just last week criticised the policy for deterring people from work and hitting those on low incomes disproportionately.

As Labour councils we’ve also been fierce in our opposition, and in Islington for example, to coincide with our local campaign on the issue, I’ll be attending a DWP Select Committee today (5th of September) to voice my grievances against this unfair scheme.

To discuss these issues, and share best practice on campaigning against the changes, I’ve also organised a fringe event at the Labour Party Conference, where I’ll be joined by Shadow Local Government Minister Hilary Benn MP and Cllr. Steve Houghton the leader of Barnsley Council. The event is on Tuesday the 2^nd of October 2012 at 6.30pm at the Mercure Manchester Piccadilly Hotel – a five minute walk from the secure zone.

If you can’t make it to conference but would still like to get involved in our campaign, please take a minute to sign our online petition here.

Catherine West is the leader of Islington Council

Related posts:

1. Why ‘millions versus the millionaires’ isn’t the slogan we need
2. Labour should be standing for the millions not the millionaires
3. It is time to reject rule by and for the millionaires in favour of the millions
4. ‘Strike Action With A Twist’ Can Give Millions to Communities
5. Local government finance – not sexy, but important