One of the main architects of the Poll Tax of 1990 has warned Coalition ministers they should expect similar chaos over next year’s plans to impose council tax on thousands for the first time.
Conservative peer Lord Jenkin, Environment Secretary under Margaret Thatcher, has said plans to cut Council Tax benefit would hit the pockets of the working poor. He told the BBC that the government needed to be braced for a ‘backlash’ over the complicated changes to Council Tax benefit, which is paid to 5.9 million people.
Local authorities have now published proposals to effectively end the 100 per cent council tax discount for hard-pressed families. Thousands of the poorest South Devon households now face a Council Tax rise next year.
Local authorities are to be put in charge of Council Tax benefits as the overall budget for rebates is slashed by 10 per cent. However, pensioners will be protected against any reduction – some cynics are noting that pensioners are often Conservative voters.
All residents will pay at least 25% or 30% of their bill from April if plans put out for consultation by local councils go ahead.
Latest figures show that Council Tax benefit is currently claimed by 17,890 people in Torbay, 6,480 in the South Hams, and 10,220 in Teignbridge.
Yet, the sums are so small – on average less than £5 a week – that councils are warning it ‘would in many cases be uneconomic to recover, with the costs of collection, including legal recovery costs, being higher than the bill’. The result is that councils across South Devon are now budgeting for large losses and expecting widespread non-payment.
The potential for chaos seems to be supported by feedback across the country. For example, Castle Point Council stated that it expects non-payment of council tax from up to 59% of residents on lower incomes, while both Darlington and Bolsover admitted that they anticipate the same resistance from half of their benefit claiming residents.
Of the 17 authorities which replied to a Freedom of Information request, 13 expect at least 20% of their residents on low income to refuse to pay the new council tax.
Seven other authorities, including Rochford, North East Lincolnshire Council and Enfield Council, anticipate resistance from at least a third of benefit claimants.
Lord Jenkin’s warning about the Council Tax comes after accountants said another set of changes to child benefit could also lead to further problems because the reforms are too complex for parents to understand.
Lord Jenkin told BBC Radio 4’s The World At One that the Tories were making the same mistakes over Council Tax benefit as they made over the fated Poll Tax, which sparked riots and was a factor in the downfall of Margaret Thatcher.
“The poll tax was introduced with the proposition that everyone should pay something, and with the present structure of society it doesn’t work,” he said. “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.”