Friday, 11 October 2013

That's no way to collect Council Tax

From the BBC:

Hundreds of thousands of people have been taken to court in England for non-payment of council tax owing to benefit changes, according to the Labour Party...

Before April of this year, millions of people on low income in England paid no council tax at all, or had their bill substantially reduced. The council tax benefit system was then replaced.

The government said this was part of a wider package of changes designed to control the spiralling cost of welfare (1) - and encourage councils to find ways of helping those on benefits into work.

It reduced the overall level of funding by 10% and said each council should decide how much support to offer residents - although pensioners were protected from any cut.(2)


1) That's simply not true. The amount spent on/rebated for working age and child welfare has been very stable at around one-tenth of government spending since the dawn of mass unemployment/Home-Owner-Ism in the 1970s.

The Tories love saying that it's one-third of all government spending - but that includes the one-fifth spent on old age pensions (a cost which could be more accurately described as "spiralling" although "drifting steadily upwards" would be more apposite).

2) Inevitably.

The main point is this though, the government gives with one hand (welfare, pensions) and takes with the other (in this instance, Council Tax).

Whatever the rights and wrongs of all this, why not just withhold Council Tax at source i.e. deduct it from welfare and pensions payments? That would save a fortune in admin costs and hassle.

The same applies to rents for social housing or whatever nominal contribution a low income or claimant tenant renting from a "private" landlord is expected to make.

That would at least throw into stark focus how much (or how little) money welfare claimants get to actually live in.

We observe the same madness with the TV licence fee:

Southwark Council has issued a mass court summons to 5,800 residents failing to pay council tax, sparking fears that rent arrears could increase in the borough as a result.

The council asked around 19,000 people who previously paid nothing to start contributing £12 per month after the government scrapped council tax benefit in April.


Why not just deduct £3 a week from their welfare or pension payments and leave them in peace? For that matter, they could just add the TV licence to everybody's Council Tax bill and divvy up the spoils between themselves afterwards.

8 comments:

JimS said...

"Why not just deduct £3 a week from their welfare or pension payments and leave them in peace?"

Why not let everyone over 18 have the option to 'opt out'. The state will pay all their standing bills for them, council tax, rent, internet, mobile phone, TV. Just to make sure they eat properly we could have a state-run 'meals on wheels' service too. Bulk buying, industrial scale kitchens and distribution, highly efficient, what's not to like?

If we have to have a publicly funded BBC then it should get a grant from general taxation. The present system that criminalises the poor whilst potentially allowing millionaires to pay nothing (just need a live-in granny)is crazy. My MP, however, thinks the present system is cost-effective.

Mark Wadsworth said...

JS, yes, that is called a Citizen's Non-cash Dividend.

I'd prefer a flat universal cash amount, and the government then withholds the amount you owe in rent or tax etc.

If the cash amount happens to be enough to cover the charges for all the stuff on your list, then so be it, I'm agnostic on the precise amount.

And it is clearly idiotic to have a Citizen's Dividend and a poll tax (like TV licence or Council Tax) at the same time.

Rich Tee said...

That article is appalling. It doesn't even mention that the Conservatives imposed a cap of 2 per cent on rises in Council Tax, which Labour councils spend their time trying to circumvent.

My Council Tax went up this year and my council is Labour controlled.

Mark Wadsworth said...

RT, what relevance does that have? I'm baffled.

adamcollyer said...

" Whatever the rights and wrongs of all this, why not just withhold Council Tax at source i.e. deduct it from welfare and pensions payments? That would save a fortune in admin costs and hassle."

And that's why they don't do it of course.

Mark Wadsworth said...

AC, it's clearly one of the reasons.

But is it the only reason?

Rich Tee said...

"RT, what relevance does that have? I'm baffled."

BBC bias.

Never mind.

Mark Wadsworth said...

RT, yes of course the BBC is a bit biased and Labour's figures are probably exaggerated. I was talking about the practicalities of collection.

And yes, Labour councils have increased their council tax by one-fiftieth (2%), so what?

The Lib-Cons have increased VAT by one-seventh (from 17.5% to 20%) and have increased National Insurance by one-twelfth (from total 23.8% of wages to 25.8% of wages).

Those two tax hikes taken together have increased our tax bills by about £20 billion - which is nearly as much as the whole of council tax revenues!!! A 2% hike on council tax is only £0.5 billion.

Can you not spot the difference between a £20 billion hike in taxes on output and employment and a below inflation £0.5 billion hike on land and buildings?