With 5.9 million recipients, Council Tax Benefit (CTB) is by far the most widely claimed means-tested benefit in the UK. But from April 2013, CTB will be abolished, with the government leaving it up to local authorities to design their own replacement schemes. Sam Ashton looks at the Coalition’s latest attack on the poorest in society, and discusses what response is needed from the labour movement.
With 5.9 million recipients, Council Tax Benefit (CTB) is by far the most widely claimed means-tested benefit in the UK. But from April 2013, CTB will be abolished, with the government leaving it up to local authorities to design their own replacement schemes.
It almost goes without saying that replacing a single national scheme with more than 300 different ones will reduce transparency and increase bureaucracy. But the real issue is that the localisation of CTB comes with a 10 per cent funding cut attached.
This leaves local authorities across England with a choice: absorb the cut and make savings elsewhere, or pass the cut onto benefit recipients and reduce their support. Out of the councils who have already announced their plans, three quarters propose to charge existing CTB claimants between 8.5 and 20 per cent of the Council Tax. As a result, many of the 2.5 million unemployed claimants who currently pay no council tax face a tax increase of between £96 per year (£1.80 per week) and £255 per year (£4.90 per week), whilst an additional 670,000 low-paid working class families face an increase of up to £577 a year.
If this sounds eerily similar to Thatcher’s hated Poll Tax, that’s because it is. The Poll Tax required every household, regardless of their income, to pay at least 20 per cent of the tax. When the Poll Tax was overthrown by a mass campaign of non-payment – organised by Socialist Appeal’s predecessor Militant – council tax was introduced in its place, on the basis that the poorest families would not have to pay a penny. Now, after 21 years, this reform, won on the basis of struggle, is being taken away again.
Given the outcome of the introduction of the Poll Tax – that is, the immense anger and the resultant mass movement against the government – one would think that the government would learn from history, and would not attempt to introduce such a deeply regressive tax again. Even Patrick Jenkin, the architect of the Poll Tax, has warned the government not to repeat Thatcher’s mistake:
“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.”
But despite the lessons provided by history, the Tory-led coalition has been left with no option but to plough on with such measures. Capitalism is mired in a deep crisis and the only solution acceptable to the ruling class is to make working and poor people pay through a vicious programme of austerity. Benefit claimants have been singled out by the government, since they are considered to be an easy target due to their lack of organisation and vulnerable situation. The Tories are carrying out this attack because they believe those on the receiving end are incapable of fighting back.
The reality is that those affected simply won’t be able to pay. Benefit recipients have already seen their incomes cut to the bone by the government’s successive attacks, from the housing benefit caps, to the 1% annual increase limit and the overall benefit cap. Combined with the surging prices of essentials like food, energy and rent, this means that such families simply don’t have the money spare to start paying council tax. Faced with a choice between feeding your children and paying your rent or paying council tax, what parent is going to choose the latter?
This will undoubtedly leave millions of families indebted to their local authority, and debt is now a big business in the UK. When people do not, or cannot, pay their council tax, the local authorities apply for a liability order that adds up to £120 to the arrears; they can then send in the bailiffs, apply for imprisonment, make you bankrupt, and place a charging order on your home or deduct the tax from your benefit. Debt advice organisations are warning that the number of liability orders could double from around 2 million to 4 million as a result.
If the council sends in the bailiffs then the debt begins to spiral. Bailiffs charge £50 for sending a threatening letter and you will be expected to pay £200 for the pleasures of having a bailiff visit your home to harass and intimidate you or your family. As a result Britain’s top bailiffs earn handsome salaries, thanks to lucrative contracts handed out by the state and the lack of information for the most vulnerable sectors of the public about when they are being fleeced. For example, bailiffs famously charged £230 pounds for seizing a doormat in Slough. Britain’s seven biggest bailiff firms generated £100million in turnover between them in 2010, making profits of more than £10million. The country’s largest bailiff firm, Equita, made £4.5million.
The overall result is that millions of families are at risk of threatening visits from thuggish bailiffs, as local authorities accumulate vast holes in their budget from unpaid council tax and bailiff firms rake in the profits.
Whilst the ruling class may be unable to learn from history, we can and must. A mass campaign of non-payment of council tax must be waged, with the labour movement organising through community groups and tenants associations to protect families from bailiffs. Labour councils must refuse to implement the cuts handed down by the coalition government and should be at the forefront of the movement against the slashing of the council tax benefit. Any attacks on vulnerable families should be met by striking council workers. Such militant action would paralyse the government’s attempts to make the poorest pay for the crisis. This is the only way that these vicious austerity measures can be defeated.
The Poll Tax was an attack on all working people and this helped to galvanise the fight back. These reforms are an attack on the poorest in society, and it is the task of the entire labour movement to defend against the agony that is inflicted on our brothers and sisters. We must stand together and fight.
