Letter - Full story of the poll tax
Andrew Finch talks about the reality of the poll tax – or Community Charge – and then reveals a tiny part of it.
The whole reality of the situation was that this tax benefited the rich, while costing 60 per cent of the population more.
The poll tax was a flat rate tax that was paid by each individual adult in the household, with few exceptions.
It was introduced by Margaret Thatcher.
Before the advent of this ‘fairer option’ the rates on my council-owned property stood at £310 per annum – afterwards they increased to £975.90.
Or, £325.30 each for the three adults in my household.
The problem was that my wife did not work and my son worked only part-time, we did not – and we never have – claimed any benefits for unemployment, housing or sickness.
Having explored all local areas for a solution I wrote to Parliament, to Chris Patten, requesting relief for a non-earning wife.
He quoted the example of a man earning £30,000 a year with a non-earning wife living next door to a couple who were both earning £20,000.
And the unfairness of my suggestion, with a total income of £l0,000 the example was lost on me.
Unfortunately my savings disappeared before the Poll Tax did.
Bob Wydell, Oswestry
Comments for: "Letter - Full story of the poll tax"
Ken Adams
Yes that was the funny thing about it why should the poll tax have been so much per person.
The idea was sound in theory but not in practice.
Roger
They may have changed to name and the method of calculaing the council tax but they still got what they wanted. The rich pay less.
If we ever want to get back to the rates we need to fully index council tax to property values. At the moment the top band is set too low so no matter how big your property the most you will ever pay is Band H
Current bands In England, the council tax bands are as follows :
Band Value[ 1993] Ratio Ratio as % Average
A up to £40,000 6/9 67% £845
B £40,001 to £52,000 7/9 78% £986
C £52,001 to £68,000 8/9 89% £1,127
D £68,001 to £88,000 9/9 100% £1,268
E £88,001 to £120,000 11/9 122% £1,550
F £120,001 to £160,000 13/9 144% £1,832
G £160,001 to £320,000 15/9 167% £2,113
H £320,001 and above 18/9 200% £2,536
So if you live in house which is of average value you pay 100% but it only falls by a maximum of 33% no mater how low the value. It increases up to 200% but can never be more regardless of how much your house is worth.
Mr average earns £26K and pays 100% so anyone who eanrs £52K and has a nice house pays 200% but after that no matter how much you earn or how much more your house is worth you never pay any more. Thus the cost to the wealthy is limited. Under Rates that was not so, you paid according to value.
To get back to where we were under rates we would need to add ever more bands up to the maximum value of houses, say £4 million. At the bottom end the ratios are weighted so the charge does not fall propotionately. The people in lower value houses pay proportionately more. At 1993 prices if your house is half the value of the average or less you still pay 67% of the council tax.
Therefore for the people with below average value houses they pay more under council tax than under rates, and the wealthy with well above average valued homes they pay less.
ph7
The rise in the council tax has been caused by central government. Firstly, they fixed the level of business rates. In many council areas this reduced the amount of income from businesses and as a result the difference had to be made up from residents. Secondly, in real terms, the block grant has gone down. Central government reduced what it gave as a percentage to local authorities and spent the money on wasteful PFI projects and grandiose schemes like the NHS central computer system. Local authorities had to increasingly rely on the council tax for funding.
Another point never fully pointed out is that successive governments have given local authorities more to do. In the past 10 years there has been piece of legislation after piece of legislation which forced local authorities to take on new responsibilities, hire more staff and invest in new equipment. During the Blair and Brown years, there was a mania for statistical returns and league tables forcing councils to spend millions on bean counting.
Now, with less fund local authorities are picking up more functions via the localism agenda, for example, trading standards is about to take over many of the functions of the Office of Fair Trading when it is wound up.
Peter
Blimey. I never thought I'd agree with something Bob Wydell had written. And he didn't mention the EU once!
Johnboy
I thought the council tax was to pay for the services that government provide, not to clobber people with big houses !!!
Roger
What ever made you think that. Most of the services provideed by Local Authoritys are dictated by central government and financed by a combination of Council Tax, Business Rates and Support Grants. Central government controls the business rares and support grants so only the council tax is levied by the council. Education and Housing immigrants is by central government dictate as is social services, so the council is not doing what the residents say they can. Concil tax makes up the differences between what is required and what it costs. It claims to be progressive but is a very skewed progression.
Wenlock Un
A very valid opinion, Johnboy and leads us to the fundamental question that must be answered before we can debate whether any tax system is fair.
Do our taxes represent a direct charge for state services we individually consume or a contribution to the wellbeing of society as a whole?