Blood From A Stone – Hilary Benn On Taxing The Poorest

hilary_benn07:40 Friday 11th October 2013
BBC Radio Cambridgeshire

[D]OTTIE MCLEOD: Have you been forced to pay council tax for the first time this year? Well if you have, you’re not alone. Labour says that over 150,000 people have received a court summons for non-payment of council tax since the Government changed the welfare system in April. Here in Cambridgeshire the worst affected area was Peterborough. Rather than absorb the Government cuts like many other councils in the county did, Peterborough City Council actually increased the cut, meaning that nearly 9,000 households are paying council tax for the first time. We can now talk to Hilary Benn, the Shadow Secretary of State for Communities and Local Government. Good morning.
HILARY BENN: Good morning.
DOTTIE MCLEOD: Now we saw long lines outside court in Peterborough because of these changes, outrage from many of those affected. But isn’t it fair enough, if people don’t pay their taxes, that they should be taken to court?

HILARY BENN: Well of course people should pay their council tax. But the problem here is those who’ve been affected by the change since April are people on the very lowest incomes. And that includes disabled people, carers, war widows, and veterans, many of whom were struggling to make ends meet already. People are looking at the bills they’ve got in front of them, feeding the family, paying the energy bills. Some may be affected by the bedroom tax. And they’re struggling. And the Citizens’ Advice Bureau, who see a lot of people up and down the country who are finding times tough, they’ve put it starkly this morning. They’ve said, we are seeing families that are having literally to choose between staying on the right side of the law and feeding themselves. And of course we should be concerned about that. And do you know, this change was brought in as you said, in April, affecting people on the very lowest incomes In the same month the Prime Minister said it’s very important we should give a tax cut to people earning more than £150,000 a year. And frankly that tells you everything you need to know about whose side he’s on.
DOTTIE MCLEOD: Now Peterborough City Council slightly unusual in Cambridgeshire at any rate, because they have actually asked people to pay more council tax than the Government cut would necessarily mean they had to. So some people in the city are paying 30% of their tax bill now. The Government cut to the council grant was only 10%. How many other councils are doing something like that? Is it unusual?
HILARY BENN: Well there are different schemes in different places. The Government, you’re right, cut the funding by 10%. But they also said that pensioners should be protected from the change. So the more pensioners you have in your area, the bigger the amount of money you have to make up from everybody else, in order to be able to cope with the change. And look, councils up and down the country are facing big reductions already in the funding they get from Government. They’ve been hit hardest, the public sector, and councils representing the most deprived communities have faced the biggest cuts. So councils are struggling to deal with this. The cause of it is the change in the law, which Eric Pickles and David Cameron made. And each council is coming up with a different scheme. But you’ve got places where the council may for example be freezing the council tax for most people, but for the very very poorest on the very lowest incomes they’re facing an increase. Now how exactly can that be fair?
DOTTIE MCLEOD: Well you talk about the cause, and of course that’s a very emotional word for some people, because how far do you go back? Under the last Labour Government the amount that the Government was paying out on council tax benefit doubled, under the Labour Government. Five million households in England were claiming council tax benefit. And of course no-one’s going to argue that times are very very tough for a lot of people at the moment. But why should some people be paying council tax and subsidising others so that they don’t have to? Isn’t it fairer that people share it out a bit more?
HILARY BENN: Well that was indeed the approach that was taken when the poll tax was brought in. There are echoes here of the poll tax. The Ministry who designed Poll Tax Mark I described this as Poll Tax Mark II.
DOTTIE MCLEOD: But this is different, because this is means tested, or at least there are criteria. Not everyone pays the same.
HILARY BENN: No of course they won’t. But that’s the same with income tax. The thing to remember about council tax benefit is the money never goes to the individual. It’s money that goes from the Government to the council to reduce the liability. And if you are on a low income, you don’t pay income tax. Why? Because you get an allowance. And in effect, council tax has worked in the same way, and it’s recognised .. and indeed the Conservatives last time they were in Government recognised when they brought in council tax, we shouldn’t expect a minimum payment from everyone. Well they changed that in April. And as a result, those on the lowest incomes are having in some cases to make a payment for the first time. And they’re really really struggling. And tough times do mean tough choices. I accept that. But how can it be fair to penalise those on the lowest incomes in the same month you’re giving a tax cut to those who are most well off? And that’s the decision that David Cameron has made, and I think people will judge him for it.
DOTTIE MCLEOD: That is Hilary Benn, the Shadow Secretary of State for Communities and Local Government. When we first covered this story .. this is of course something that we’ve touched on before on BBC Radio Cambridgeshire, as you’d expect from your local radio station .. Peterborough City Council, they said back then that it had been forced into this increase because its funding from central government had been seriously reduced. But it had hired extra staff, sent information out, and held advice sessions for residents about the changes. It also said that courts summons could have been avoided if residents had acted upon warnings that the Council had issued, if people had got in touch earlier on and said we’re having trouble, that maybe going to court could have been avoided. But the queues outside of the courts in Peterborough, they were long. They were long. That was Hilary Benn, the Shadow Secretary of State for Communities and Local Government, blaming it all on the Conservatives. I expect that if we had Mr Osborne the Chancellor on, he would say he’d been forced into making these cuts by the last Labour Government, and the debt that they accrued. It’s the kind of thing that governments will argue about until they are blue in the face.