A NEW POLL TAX - HEARTS WILL BE BROKEN

25 October 2012

TAXING BENEFITS WILL FORCE TWO MILLION MORE INTO DEBT - HEARTS WILL BE BROKEN

Rev Paul Nicolson,  October 2012

When people do not, or cannot, pay their council tax the local authorities apply to the magistrates courts for a liability order, it adds up to £120 to the arrears, they can then;

  • send in the bailiffs,
  • apply for imprisonment,
  • make you bankrupt,
  • place a charging order on your home
  • or deduct the tax from your benefit.

We are expecting the number of liability orders to double from around 2 million to 4 million as a result of the Local Government Finance Bill which will tax benefits. We fear 2 million is an underestimate. The Bill will return to the Commons from the Lords on the 31st October.

In May 2012 there were 5.92 million Council Tax Benefit claimants, a majority of whom will have that benefit reduced by 8.5% from April 2013 and by 20% from 2014. The coalition expects the loss to be paid out of current benefits or the new universal credit. But people are paid benefits to survive in this expensive economy; taxing benefits turns life into a misery of debt; it is a political lunacy.

Arrears are inevitable and will be enforced by local authorities. The liability order adds up to £120 to the council tax arrears and then the bailiffs add their fees, which can mount up to £400 when they are despatched to the defaulters’ homes. The tax on benefits will range from £3.30 a week, up to £9.90 a week. Pensioners will be protected; the burden will be carried by the working age population in or out or work. Many of the debtors will be in work. Many hearts will be broken by debt.

When the poll tax was introduced in 1989 it too charged 20% of the tax against benefits; the then Tory government added an amount to JSA to enable the payment of the tax by the unemployed. The policy is quite different this time.

Sanctions now stop or reduce benefit payments for between 2 weeks and six months. 508,000 benefit sanctions were handed out in 2011, a shocking rise from the 139,000 sanctions imposed in 2009. There were no sanctions in the 1990s.

The rate of increase in benefits had not been reduced then as they have now by the move from RPI to CPI,
there were no housing benefit caps,
no bedroom tax,
no £500 cap on all benefits.

The adult JSA was totally inadequate then and has reduced in value over the past 50 years. The universal credit will be broadly similar, currently £71 a week for a single adult and £111.45 for a couple, already unable to pay for food, fuel, clothes and transport while prices escalate, let alone the council tax.

The government impact assessment on the housing benefit caps showed they expected 460,570 households to lose an average of £12 a week half of them with children. They will be hit by a further £3.50 o £9.50 a week council tax from April 2013. In addition to that the £500 limit on all benefits received is expected to hit a further 56,000 with a £93 a week hammer blow.

No one in government has undertaken a review of the cumulative impact of the cuts on their poorest fellow citizens. Debt, debt miserable debt will be the result.

Taxing benefits brings last straws and breaking backs to mind.

Nevertheless, in the comparatively “benign” Thatcher regime of the 1990s, there were four million liability orders issued by September 1991, rising to 8 million by the end of 1992 and an estimated 15 million by the end of 1993 when the government stopped counting.

The magistrates courts were unable to cope, the Magistrates’ Association asked to be relieved of their task by the end of the first year and the local authorities sent the bailiffs out to unpleasant abuse while charging fees of up to £400 each case. Gangs of “bailiff busters” were roaming some deprived arrears. From 2013 the bailiff companies will profit.

The local authorities, the magistrates courts and the advice sector already swamped will be overwhelmed. The coalition is blind;

  •  to the misery of debt they are inflicting on decent people,
  • and the cost of that misery to the taxpayer in the extra demands made on the health service and in
  • the damage done by family stress to children’s education and the economy at large.

All we can do is yell at Parliament stop smashing your poorest fellow citizens and their children with the misery of debts in the name of deficit reduction and get a grip on the taxes of those who can carry the burdens created by 30 years of bad government; and yell we must.

--
Rev Paul Nicolson
Taxpayers Against Poverty
93 Campbell Road,
Tottenham,
London N17 0BF
0208 3765455
07961 177889
also at http://www.z2k.org
also at http://www.prohousingalliance.com
http://www.taxpayersagainstpoverty.org.uk
http://www.facebook.com/pages/Taxpayers-Against-Poverty/299911526728884


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