Labour: ‘Thousands face higher tax’

thousands face higher tax

thousands face higher taxFamilies on low incomes could soon face higher council tax payments under government legislation currently going through Parliament.

Labour said that under the Local Government Finance Bill, Communities Secretary Eric Pickles aims to save £450 million by cutting funding for council tax rebates by 10% from April 2013.

This means it will be up to individual local authorities to decide how they make up the shortfall, something which shadow local government secretary Hilary Benn claims puts them in a "terrible dilemma".

He said the planned change is forcing councils to decide whether to impose the tax hikes on the working poor, the disabled or the unemployed, comparing it to the poll tax in the 1980s which saw local authorities forced to pursue poor people through the courts for payment of Margaret Thatcher's community charge.

Mr Benn commented: "Do they increase council taxes on the working poor - over 760,000 people nationally work but have lower council tax because their income is low - or the disabled or families with young children?

"Just as happened with the poll tax, councils will be forced to chase people on low incomes for money they simply don't have."

What does this mean?

The first councils are now beginning to set out how they plan to deal with the change, with Manchester launching a consultation last Friday on proposals to require all households except pensioners to pay at least 15% of the council tax bill.

Meanwhile, Barnet is proposing a minimum 25% charge for all working-age residents. However, it is yet to be seen what the majority of councils plan to do in order to make up the deficit.

Any increase to households on low incomes would certainly have a negative effect on our budgets and spending power.

Since the introduction of council tax in 1992, rebates of up to 100% have been available to the unemployed, disabled people, full-time carers and households on low incomes, many of whom have not been required to pay the tax at all.

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