Essex: Claims of two-tier society as families face locally-set limit on council tax subsidy
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VULNERABLE families being forced to pay a portion of their council tax is “Robin Hood in reverse” and will create a two-tier society, it was claimed last night.
About 20,000 north-east Essex families will have to pay 20% of their 2013/14 council tax bill from Monday, an anti-poverty think tank has said, after councils were granted powers to set their own limit for the new council tax support scheme.
The average increase for a low-income family in Colchester, Braintree and Chelmsford will be £200 a year, one of the highest hikes in the country at 43% above the national average increase of £140, the Joseph Rowntree Foundation (JRF) said.
Colchester Labour councillor Tim Young said: “The way the Government is targeting people on the lowest income is despicable.
“Millionaires are saving thousands of pounds in taxes while those who have not paid council tax before are facing more misery and suffering. They are in for a shock.
“It is Robin Hood in reverse. It is very divisive and will create a two-tier society.
“There is already evidence child poverty is on the increase and government policies were supposed to address and reduce this.
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“With the bedroom tax as well, it is just going to increase the number of evictions and the amount of debt people have.”
In Colchester, 8,200 families who currently do not pay all of their council tax are expected to pay £187 more a year on average, the research, carried out by the New Policy Institute (NPI) for JRF, showed.
About 5,800 affected families in Braintree will pay £203 more annually – 45% more than the national average – while in Chelmsford 5,800 affected families will hand over £218 more; a 56% hike above national figures.
In Suffolk, meanwhile, affected families will pay an extra £81 – nearly half the average national rise – meaning north-east Essex families are paying 150% more than their county neighbours.
Peter Kenway, director at NPI, said councils were taking a gamble with the policy.
He said: “The poor are getting poorer. It undermines all the work New Labour did to get children and the next generation above the poverty line.
“It is very tough. It’s another turn of the screw. It seems we are turning into a society where we are extremely tough on those at the bottom of the income pile.
“Local authorities are taking a risk asking for taxes that they are not going to get. It is hard to see how poorer families are going to be able to afford it without further cutting into their savings.”
Council tax benefit is being replaced by a new system – council tax support – and responsibility for it is being moved from central government to councils.
At the same time, the total spent on the benefit is being cut by 10% – and each council in England has had to decide whether to pass on the reduction to residents.
The study found 232 local authorities have devised schemes that will demand council tax from people regardless of income, while 58 will retain current levels of support for families.
Chris Goulden, head of poverty at JRF, said: “Making up the shortfall will be beyond most, with working hours under pressure and benefits falling behind inflation.
“This tax hike will push people into poverty or cause more hardship for already very poor households, taking money from families who had little to start with.”
About 2.4million low-income families are expected to be affected following the changes, but pensioners are protected from the tax hikes.