‘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.
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
ReplyDeleteThank 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.
DeleteHave done. Put up details of your workshop this Saturday.
ReplyDeletehttps://www.eventbrite.co.uk/e/reimagining-local-government-london-for-the-many-not-the-few-tickets-43088628247
ReplyDeleteThe 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.
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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