Friday, 16 March 2018

Is Council Tax really Poll Tax? Where is the momentum for a new campaign?





‘I have not been able to pay my council tax for last four years. Bailiffs have lied to me to get money from me. I still can’t afford it!’ says Joanna Robinson on Money Matters show on East London Radio in March 2018.  During the period 2016-17, bailiffs were used by councils on nearly 1.5 million occasions in order to attempt recovery of council tax arrears. As in Joanna's case, residents were summoned to court for being too poor to pay - accruing court costs, subjected to the ignominy and anxiety having to face enforcement agents, and already too poor to pay, further indebtedness.   As I hear the horror stories of bailiff’s knocking on debtors’ doors under the new Council Tax Reduction Scheme (CTRS), I am beginning to worry that the Scheme is really just a Poll Tax rehash.

I was too young to remember what the Poll Tax was when it was first introduced in the late 1980s. My parents never spoke about it. In my work I started to notice from 2013 onwards that more debtors were seeking advice from me primarily regarding council tax arrears. Councils say they need to charge residents more; they blame the central government’s austerity measures for their budget shortfalls and therefore increased charges are necessary. What, then, was this Poll Tax to which I am drawing comparisons with the Scheme?

The Community Charge was introduced by Margaret Thatcher’s government in the late 1980s. It was a fixed tax per adult with reference to the electoral register – hence the term ‘Poll Tax’. There were differences in the amount charged between councils throughout the country.  In Westminster, London, according to the Guardian newspaper:

‘The Duke of Westminster, who used to pay £10,255 in rates has just learned his new poll tax: £417. His housekeeper and resident chauffeur face precisely the same bill.’

With few exceptions, such as those with severe mental impairment, members of religious communities and those sleeping rough, there were no exemptions.  Even those receiving income support still had to pay 20%. According to the government’s own survey 2.8 million people did not pay Poll Tax between 1991-2.

To recover such a mountain of unpaid debts, councils throughout the country tried to recover sums from workers’ salaries; and some of those on benefits had money deducted from their benefits. In most instances, local councils were not able to recover sums from benefits since what was owed was often too large to be recovered within the relevant financial year, once the Liability Orders were obtained from Magistrates Courts. In such situations councils would pass these debts to private bailiffs for recovery.

According to local law centres in Bristol, bailiffs delivered over 4,000 notices in May 1991 for non-payment; only half a dozen of them were recovered. By July 1991, when the tax had been in place for more than two years in Scotland, bailiffs had carried out over 41,100 visits but they hadn’t managed to sell goods of a single individual. According to Hackney Gazette, debt collectors themselves incurred cash flow problems because they needed to employ more people to recover arrears but received less money from Hackney Council.

‘Rayner Farrar & Co…had 15,000 liability orders…Four out of five of all those Liability Orders weren’t collectable because the Poll Tax register is in such a terrible mess…We desperately need accurate financial information. It is not financially viable for us to act for Hackney Council any longer, we’ll go bust if we continue.’

The Labour Party did organise a campaign, Stop It!, in response to outcries.  Its priority, however, was to win the national election and to replace the Tory government in Parliament. It was not going to resolve the immediate concerns faced by poorer residents and campaigners who were getting understandably frustrated with the way things were.

The Anti-Poll Tax Union, a national campaign was set up in 1987 to organise protests or non-payment of Poll Tax.  Concern was growing across the country. Initially there were 5 or 6 activists organising in small localities but within months they had built a membership of over 200. Many of them organised door–to-door campaigns, protests outside local council buildings and had ‘No Poll Tax Zone’ signs in local shops and houses. In other areas, there were informal groups of individuals who came together to agitate against the Poll Tax. 

Regarding the now widespread use of bailiffs, different tactics emerged in Scotland, England and Wales. In Scotland, the focus was on getting hundreds of people outside homes which were threatened and physically stopping the bailiffs.  In England and Wales, the main focus, as part the Anti- Poll Tax Union's strategy,  was to make sure that people knew their rights.  In law centres in Bristol, they distributed leaflets and contacted all the local radio stations to inform and unite residents.

The pivotal moment in the Poll Tax movement was the national demonstration 31 March 1990 took place in Trafalgar Square called by the non-payment campaign. Initially it started as a peaceful march but by the end of the day 341 people had been arrested and thousands injured. Although the government argued that the violence was pre-planned, many argued that violence was provoked by only a small number of protesters and by the violence of the police themselves.

Due to the unpopularity of the tax nationally, it was replaced in 1993 and many would argue it brought down Margaret Thatcher as Prime Minister. Subsequently, residents in receipt of minimum state benefits received full council tax support; council tax was charged based on the size of their property; like previous rates system, along with other exemptions to ease the burden on those deemed too poor to pay.

Two decades later: new welfare reform was introduced by the Tory government - the overwhelming majority of local authorities, either Tory or Labour, expect a minimum contributions from residents, whatever their circumstances. Sound familiar?

Under a Freedom of Information Request, Child Poverty Action Group (CPAG) and Zacchaeus Trust 2000 obtained data and undertook a research project on the impact of the introduction of the new CTRS in local communities around London.   Their findings were published in Still Too Poor To Pay in 2016.  It appears that the overwhelming majority of councils in London were charging poorer residents. Over 318,000 court summons had been issued to London’s poorest households since April 2013 after falling into arrears.  Almost 250,000 low income Londoners were charged over £27 million court costs. The figures are set to increase from April 2018 since many councils, facing further cuts to budgets, have been passing on the burden by increasing charges to the poorest people.

Nationally the data is even more shocking - more than 2.3 million cases were passed to private bailiffs in 2016-17 by 252 local authorities, according to the report published by Money Advice Trust’s Stop the Knock. Over 50% of the recovery sums sought was for council tax arrears. Just as in the Poll Tax period, many councils are unable to recover the council tax through benefit reductions. After a Liability Order has been obtained the amount of the debt often cannot be claimed from benefits within the relevant financial year, given what can legally be deducted from weekly benefit. Inevitably this paves the way for councils to use private bailiffs.

In light of such shocking statistics, different councils have taken different steps to address hardship in the community.  A handful of councils have given full Council Tax reduction to their poorer residents, as in the case of the London Boroughs of Tower Hamlets and Camden, whilst other councils have carried on demanding money through the courts and bailiff enforcement action. The London Borough of Hammersmith & Fulham has instigated an ethical enforcement approach and will end the use of bailiffs for council tax arrears collection from 1 April 2018.

‘Heavy handed debt collection in the public sector is counter-productive: court action, bailiffs and lawyers call cost money, and can create high levels of stress and anxiety in families that find themselves in debt’ said Cllr Max Schmid, Cabinet Member for Finance of the council.


What can we do? Many ward members put forward motions to the Hackney Labour Party once the council began a consultation in November 2017, increase minimum council tax contribution from 15% to 20%. The overwhelming majority of the members of the Party voted against the rise. Local trade unions, Tenants and Residents Associations and advice charities also opposed the council’s proposal. Regardless of this resistance, the council decided to increase the contribution by 3.8% on the grounds that central government had cut at least 10% of the council funding each year since 2013 and in order to continue to provide essential services in the borough. 

Regardless of the political make up of local councils, there has been a trend to charge those least able to pay council tax. If they are to pay, many are either using credit cards or getting loans from pay day lenders with all the attendant financial risks. I hear this constantly in my debt advice work. Further evidence of financial difficulty is indicated by the rise of people using food banks.  The Trussell Trust Foodbank Network distributed just over 1,100,000 emergency three day food supply packages to people in crisis 2015-16. Between 1 April 2016 and 31 March 2017 distribution had risen to near 1,200,000 emergency packages.

The situation for poorer people and communities is getting worse. Sadly, local council policy is very similar to what it was during the Poll Tax years and compounds the impact of Tory austerity policies. The real challenge is: can we organise our communities? If we can then in what form - who is strong enough to stand, and how can we manifest sustainable shift to a more just and effective system? Otherwise, I fear, millions of people like Joanna, are going to be left to suffer in silence.

8 comments:

  1. I completely agree that council tax collection via liability orders is a revenue raising decision directly affecting individuals that can least afford the additional costs. Further, the use of bailiffs is placing obstacles in the way of collecting revenue in that councils then refuse to negotiate directly with advice agencies/clients and often state they will not accept payments on the account; this is contrary to their responsibility to collect revenue under Reg 45(3) Council Tax (Administration & Enforcement) Regulations 1992 SI 613). Complaints in this situation should be made to the District Auditor for investigation

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    1. Thank you for your comment. Please promote the blog to everyone you know to raise awareness of this issue. It is no longer just a local issue. I personally believe that this is also a national issue.

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  2. Have done. Put up details of your workshop this Saturday.

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  3. https://www.eventbrite.co.uk/e/reimagining-local-government-london-for-the-many-not-the-few-tickets-43088628247

    The venue is above. But here is the blurb for my workshop:

    3pm. Room 3 - Is Council Tax Poll Tax? Yes. Many still too poor to pay.

    Ripon Ray, money & debt advisor, blogger, broadcaster. Cllr Pamela Fitzpatrick and Marc Francis, author and Director Z2K


    Our session will recap the historic context of poll tax, poll tax riots, and what came after. We will share stories of the current situation - the system changed to Council Tax and, to assist the poorest, the Council Tax Reduction Scheme. The scheme does not work!

    The poorest are still too poor to pay, and then on top must face court actions and bullying bailiffs. Councils across London have tried to cope by passing on a small slice of many rounds of central government cuts. How can we come together and fight back?

    Ripon will set out how a new campaign could take shape. Please bring your ideas.

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  4. The Guardian has an article here on the same subject: https://www.theguardian.com/money/2018/mar/20/scrap-highly-regressive-council-tax-says-thinktank?CMP=fb_gu

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  5. Nice blog, thanks for sharing the information. I will come to look for update. Keep up the good work. tax preparation

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