Wednesday, 3 April 2013

Cameron's poll tax has arrived

The beginning of April saw the replacement of council tax benefit by council tax reduction schemes in every local authority.  The new schemes are not 'benefits'- they are regarded as an extension of the various exemptions and discounts that applied already to the tax; secondly, they are local, not national, so that every council's arrangements will be different in detail.  One thing does apply nationally, though, and that it the fact that everyone will have to pay something.  Previously council tax benefit covered 100% of the liability for those on certain benefits such as Job Seekers' Allowance and Income Support.  Now they must pay a minimum contribution of at least 5%- although their income has not gone up to assist with this.  In fact, as we know, benefit rises have been reduced.

This measure cannot be viewed alone.  It must be considered alongside the bedroom tax and the benefit cap. The impact of these will be to require low income tenants to also contribute extra sums out of their subsistence incomes to cover rent no longer covered by housing benefit.  The benefit cap seems particularly unjust: the major proportion of most weekly benefit payments are housing benefit.  That money, of course, goes straight to landlords to pay their rents.  The weekly benefit entitlements sound enormous, but this is misleading as it is the landlords, not the tenants, who are gaining.  In the present overheated private rental market, it is unrealistic to suggest that tenants can easily move- or move to any cheaper accommodation- and certainly improbable to imagine that most private landlords will negotiate lower rents.  If the HB bill is too high, cap rents- don't punish the consumer!  But that is not how the government has decided to solve this problem.  It seems that they have never heard of "fair rents" or recall the role of the local authority rent officer in fixing a maximum reasonable rent for a property.  That would have been the proper way to address the problem.  Instead, tenants are asked to find money from the sums paid to them for food and fuel to cover large contributions to top up the HB. 

So, what will be the effect?  Well, what would you pay if you had to choose: your rent (or face certain eviction) or your council tax (and face a liability order and a bailiff's visit- when you don't have to let the bailiffs in)?  Any rational person will pay the landlord and not the new council tax liability.  Money will be extremely tight and very difficult choices will be involved, but this is what many advice agencies will have to be telling clients.

What will be the impact for local councils?  They will see rent arrears rising from those hit by the bedroom tax but trapped in their current accommodation; they will see CT arrears rise as people prefer rent over tax.  In addition, as the schemes for reductions have been devised locally at great cost to each council, there will probably be many initial appeals to the Valuation Tribunals to challenge the details and workings of these new regimes.  These will clog up the system and incur substantial expense for local authority staff.

More work for bailiffs, then, but tiny debts owed by people who are desperately short of money.  Nice one, Dave.

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