The Case for Land Value Tax

This video was produced by the Coalition for Economic Justice (CEJ). They stand for:-

1. We seek to influence politicians and policy makers by establishing contacts, meeting with parliamentarians, political parties and government officials, lobbying and holding events;

2. We seek to influence the wider public through work with opinion formers and the media and  by appealing to peoples’ innate sense of justice;

3. We seek to engage and collaborate with a wide range of organisations with similar or compatible aims, particularly (but not exclusively) with those seeking money reform, linking the public collection of the community-created value of economic rent with the need for a just and sustainable economy; and

4. We seek to work with academics, think-tanks and the range of educational institutions to influence both the understanding of economic rent and the development of academic courses and to encourage the involvement of students”

Check out their website here...

Progressive Council Tax – Fairness in Action

An idea emanating from Brighton and Hove Green party is creating a buzz around the whole Green party. There will be a motion debated at the party’s autumn conference on the subject which I hope will be supported and become a central policy tool for Greens in local government.

To be clear, Green party national policy is for the introduction of a Land Value Tax for raising local revenue, but this would need a change in the law, which will only come when we get a Green government. It is also national policy to oppose the current austerity measures as pursued by the Coalition government and which is largely accepted by the Labour party. But again, we need to hold power nationally to affect this successfully.

In the meantime, we need a credible strategy at local government level where we can and do (in Brighton and Hove) run local authorities, which is more than just implementing cuts as directed by national government, as we are at the moment. Progressive Council Tax (PCT) is the best idea that I have heard of for providing us with a distinctive and radical alternative to the present system of local taxation, which is controllable at local level.

So, how does it work? First a referendum needs to be held and won in a local authority area on raising Council Tax by more than 2%, in fact much more than 2%, with the higher the increase, the less the majority will pay.

Then residents are required to apply for a reduction in the charge, which would be means tested, with around 80% of residents receiving a reduction, meaning most would actually pay less than now. For the other 20% who do not qualify for a reduction there will be steep increase in Council Tax. This is all based on residents’ income and ability to pay, which is perfectly fair and counter to the policies of the ConDem government. Vulnerable groups will get special help to ensure they pay only the correct amount.

I’m told that this does not require any change to the law nationally, so if voters can be convinced that this a fairer way to fund local services, and for most it will cost less, then there is nothing to stop a local council introducing this approach.

PCT has a number of advantages, I think. It is fairer, because those who can afford to pay more will do so, leaving those on more modest means either unaffected or better off. It also has the potential to reduce some of the cuts to services that are required by national government reducing direct grants to local authorities, and so at least some services and jobs are retained.

Then of course there is the politics. Would Labour run councils for example, follow suit and introduce the scheme themselves? If they saw it working in Brighton and Hove, they might consider it, but if not then the Green party will have staked out an alternative approach, which to use sales parlance, would be our ‘Unique Selling Point’, offering the voters a true choice in how local services are funded.

There is probably a huge amount of detail to work through on this idea, in practically introducing PCT, but I’m sure that can be achieved, and in principle it can be justified in terms of fairness. We need to be bold as a party in these testing times. PCT’s time has surely come.   

Haringey Council Tax Benefit Reductions to Cause Increase in Poverty

A local activist writes an open letter to Haringey council opposing their proposed reductions to Council Tax Benefit:

I am a resident of Tottenham, living at 93 Campbell Road, N17 0BF; I pay the full rate of Council Tax (CT) for this property. I am responding to the Haringey Council's consultation about the abolition of the national council tax benefit (CTB), and about Haringey’s proposals to replace it with their local scheme.

I write to oppose your proposals on the grounds that the 25,560 households, who now pay no council tax will have to pay 20%, or around £300pa, from April 2013.

It is irrational on three grounds;

•benefits are paid by the Department of Work and Pensions to our poorest fellow citizens to provide the necessities of life; they are already inadequate in work and out of work and the benefit claimants' health and well being will put at risk, as will their children's education, by taxing those benefit incomes. 

 •there are so many cuts to benefits being made by the Department of Work and Pensions to the already inadequate benefit incomes that the risks of ill-health mentioned in (1) are multiplied.

•the stress of enforcement in families who cannot pay places expensive demands on the mental and physical health services and the schools

 •no account has been taken of the Joseph Rowntree Foundation minimum income standards which underline the inadequacy of the benefits before they are taxed.

•the increasing number of calls on the three food banks in the Borough are further evidence that benefit claimants will not be able to pay the council tax

Haringey is also abolishing the CTB for an unspecified number of people whose level of savings is currently over £10,000 by cutting the level of entitlement from £16,000. The council has not provided enough information to enable anyone to make a decision about whether this policy is rational or not; this is not a valid consultation.

The council says it is consulting all residents; how is the council ensuring that commitment is being kept?

In 1989 the Thatcher government added an amount to unemployment benefit to help them pay the poll tax; there is no sign of that in Haringey today.

Haringey has not carried out an assessment of the cumulative impact of the measures taken by the DWP to cut the benefits of 25,560 Haringey residents they now propose to tax; the measures impacting on the income of benefit claimants are;

1. The rate of increase of already inadequate benefits has been reduced by the move of uprating from RPI to CPI in April 2011, while prices of food and fuel escalate,

2. Housing benefit caps,

3. Bedroom tax,

4. £500 cap on all benefits.

5. Nationally sanctions now stop or reduce benefit payments for between 2 weeks and six months. 508,000 benefit sanctions were handed out in 2011, a rise from the 139,000 imposed in 2009. Many sanctions have been applied in the borough of Haringey.

6. The social fund has been abolished.

The local authorities will charge inevitable defaulters around £70 for a liability order from the magistrate’s courts, on top of the CT arrears, they and the advice sector, already overwhelmed will be swamped. The bailiffs charge defaulters up to £400 more.

Written by Rev Paul Nicolson, a local non party political aligned Haringey activist.

Council Tax Benefit Changes to cost £38 per household in Haringey

Plans to give local authorities control over council tax rebate at the same time as cutting funding by a tenth could result in the poor driven out by boroughs seeking to save money – and raises the prospect of a replay of the poll tax debacle, a report claims.

A damning assessment by the Institute for Fiscal Studies of the proposed council tax benefit changes, which start next April, says that although the reform's £480m-a-year savings equate to an average £19 per household, the working poor would be hit hardest.

The government proposes to allow councils to design a local benefit system but in return says it will cut funding for it by 10%. With 5.9 million recipients, it is more widely claimed than any other means-tested benefit or tax credit.

The cut in funding will be larger, says the think tank, in areas where council tax benefit spending is highest – the more deprived areas of Britain. It estimates the cut in funding will range from around £5 per dwelling in the wealthy City of London to £38 per household in Haringey, the fourth most deprived borough in the capital.

The report also notes that the requirement to protect pensioners in England means that the cut in funding of a tenth translates into a 19% cut in support for working-age claimants.

Those local authorities where pensioners account for an above-average share of council tax benefit spending would need to make larger percentage cuts to support for working-age recipients. For one in 10 English local authorities it would be more than 25%, with the highest value being 33% in East Dorset and in Craven, North Yorkshire.

The IFS also says cuts to council tax support are bound to hit lower-income households, as 85% of the benefit goes to the lower-income half of households and almost half goes just to the lowest-income fifth.

The report's authors warns that to limit their spending councils will have "an incentive to discourage low-income families from living in the area" and that raises the possibility that councils will – like the ill-fated poll tax of the early 1990s – be left to chase desperately poor people through the courts for small amounts of unpaid tax.

The poll tax led to riots and played a part in the downfall of Margaret Thatcher. Recalling these events, the IFS says in 1990 "the perceived unfairness of the tax was associated with non-compliance on a scale rarely seen in the UK".

However, the new scheme replicates some of the worst aspects of the poll tax. "These policies mean that all households, even those on the lowest incomes, would have to pay some council tax. The poll tax experience showed how difficult it can be to collect small amounts of tax from low-income households that are not used to paying it," they say, noting that the poll tax was "quickly replaced".

The proposed scheme also risks "severely undermining" the government's flagship universal credit scheme, which will replace six of the seven main means-tested benefits and tax credits for those of working age with a single benefit. However, the seventh means-tested benefit will be "localised".

James Browne, a senior research economist at the IFS and one of the authors of the report, said: "Cutting support for council tax and localising it are two distinct policy choices: either could have been done without the other. Whether you think that cutting council tax support for low-income families is the best way to reduce government borrowing by £500m will depend on your views about how much redistribution the state ought to do.

"But the advantages of localisation seem to be outweighed by the disadvantages, particularly as it has the potential to undermine many of the positive impacts of universal credit."

A version of this report was first published at The Guardian

Waste Recycling in Haringey

I reported here on Haringey council’s changes to refuse and recycling in the borough earlier this year. Basically, a new regime of waste collection is being rolled out across Haringey, whereby ‘residual’ waste (that put into black bags) is being reduced from weekly to fortnightly collection, but ‘dry’recyclables (paper, tins, plastics and glass), food and garden waste remain as before on weekly collection. Where garden space allows, 240 litre wheelie bins are being provided to aid the change in emphasis to recycling.

Veolia Environmental Services, the private contractor who won the bid to supply these services, has promised an increase in recycling rates from the current 25% to 40% by 2015, with an ‘aspiration’ to try to increase this further to 50%. The council says that early indications are that recycling rates have risen since the changes started to take place in March this year, although I’ve not been able to find the exact figures.

The local Lib Dems, desperate to tap into some sort of popularist issue to reverse their own unpopularity with residents, as demonstrated by their disastrous showing in the recent London Assembly elections, are waging a campaign against the new collection scheme. Just before the said elections, I received a copy of a Lib Dem leaflet through my door that had the headline, ‘ANGER at fortnightly refuse collection’. It went onto say that bins were overflowing (with one or two photos) which was increasing the amount of vermin in the borough.

I have to say, around my way, I have seen a few over stuffed bins, but by and large, the new system seems to have passed off remarkably smoothly. I have certainly not seen any ‘anger’ from residents, and can only assume that the Lib Dems are trying to whip something up, in the hope of profiting from it in the next council elections in 2014.

Haringey Green party is broadly in favour of the move to more recycling, as it reduces collection carbon emissions and reduces waste being sent to landfill, which is not only good for the environment, but saves the council (and council tax payers) money on landfill taxes levied by central government. I did raise fears that vermin might be problem after the introduction of the new system, and education of residents was the key to reducing this risk. I still think this very important, and is the only area that the Labour council has been remiss in, in this whole operation.

I recently did some work for the neighbouring London borough of Hackney, talking to residents there about (particularly) food recycling. I found most people interested in recycling and very willing to talk about the service. What I found was that many people didn’t understand how the system works for various reasons. One thing I came across was that many of the people who were worried about increased vermin, didn’t know that the food waste bins were lockable. They complained that foxes knocked them over, with food spilling out onto the street, and had given up on recycling food. A simple demonstration from me of how to lock the bins, brought surprise from these people and a promise to try the service again.

I really think Haringey should try this approach, it should pay for itself and more in landfill tax savings. Hackney has reported an early increase in over 30% of food waste recycling, so this kind of engagement with residents clearly works.

Statement on Local Authority Service Cuts and Council Tax

Recent events in Brighton and Hove, where the Green party is running a minority administration on the local council, and decided to vote in favour of a Labour and Conservative amendment to their budget, abandoning the proposed rise in Council Tax of 3.5% for this year, raises the question, what would the Green party in Haringey do in similar circumstances?

Below is a statement from Haringey Green party outlining our general position on the issue of local authority service cuts:

We appreciate the difficulties faced by Brighton and Hove Green Councillors due to Labour and Conservatives combining to defeat the proposed Council tax rise. We are disappointed that the Green Councillors felt the need to vote for the amendment because it is important that the Green Party retains its reputation for sticking to its principles. Haringey Green Party therefore wants to make clear our position on cuts to local services, imposed on local authorities by the ConDem central government. Should the Green Party obtain a position of power in Haringey, it would seek to minimise the impact of central government grant reduction by raising Council Tax locally. We will also consider creative solutions for Haringey's budget to keep costs to a minimum and maintain services. If we were unable to get these policies through Haringey Council we are clear that we would not participate in any local administration.

Furthermore, some examples of creative solutions that we would consider are:

Set up a community trust to support services for vulnerable people and children which are at risk, and ask residents to contribute what they can.

Establish a local lottery to support vulnerable people’s services and local schools – the Isle of Wight (see here) did this year’s ago and made a lot of money to support local jobs.

Host a national anti-cuts conference to explore alternatives to austerity, inviting as many local council’s and groups as possible.

Explore every avenue possible for a radical party to alleviate the damage done by the cuts and raise revenue to fund services. This could include issuing local bonds and setting up a local currency.

Consider holding a referendum for a greater than 3.5% (perhaps 3.6%) council tax rise and explain to the people of Haringey that this is necessary because of the threat to local services and jobs.

Council Tax Benefit Goes Local

The ConDem government has announced that the amount of Council Tax Benefit (CTB) from 2013 onwards will be decided by local authorities. This is being ‘sold’ by the government as part of its localisation agenda, allowing local councils to decide more policies for their areas. The Green party has long advocated transferring political power to its lowest, local level, but this policy is an extremely damaging one, and the government has another, barely hidden agenda in wanting to facilitate it.

Like everything that comes out of the ConDem government, this policy shift is all about saving money at the expense of the poorest people in the country. CTB is paid to the unemployed, and workers and pensioners on low incomes. This is how CTB will change if the ConDems get their way.

At present CTB is administered by local authorities but the entire funding comes from central government. The proposed changes will see local authorities getting a ‘grant’ from central government, similar to the present arrangements, but this grant will be 10% less than that which they currently receive. From there on in, it is down the local authority to pay this benefit.

Clearly, if local councils want to maintain payments at current levels, then they will have to find the money elsewhere in their budgets. This is not a realistic proposition for councils at present (or in 2013) as pressure is on them to make savings in all service areas, as part of central government’s budget deficit reduction programme. So it is pretty much nailed on that CTB will be reduced in most areas by at least 10%.

I say at least 10%, because it is likely to be reduced further in some local authorities because the change proposal also allows councils to set the amount of CTB that they pay to claimants. They can even pay no CTB if they so decide, and you can imagine Tory and Lib Dem run councils thinking that they can pass on savings in CTB by setting a lower Council Tax. Thus, yet again money will be transferred from those on the lowest incomes to those on higher incomes. It will make Tory and Lib Dem voters happy, and those on CTB who will suffer, well, they probably vote Labour or Green anyway, so who cares?

It is also likely to add to the social cleansing agenda that will reduce Housing Benefit (HB) which I blogged about previously here, with CTB claimants being forced out of areas that do not pay CTB, and into (poorer) areas that may continue to pay the benefit at anything like its full rate.

This very important change to the benefit system has gone hardly reported in the media, although admittedly there are many important benefit changes being proposed by the ConDem government, but these fundamental changes to a vital benefit must be opposed by all fair minded people. If they get away this, our nation will be divided and into comfortable areas and poverty stricken ghettos.

Social Cleansing in London

Boris Johnson, Tory mayor of London, has been courting controversy again with a comment he made in a radio interview about the coalition government’s proposed policies on Housing Benefit. Johnson said that he was not prepared to tolerate a ‘Kosova style social cleansing in London on his watch’. It is not the first time that he has made controversial statements in the media, but this time he has provoked outrage from government ministers, who have accused him off ‘making inflammatory remarks’.

It is perhaps a rather over the top comparison to cite Kosova, but he sure knows how to capture the attention of the media, and he is highlighting a very important issue. He may have been more accurate to compare government Housing Benefit changes to the enclosures and clearances of land in eighteenth and nineteenth century Britain, where huge amounts of rural land was cleared of inhabitants who were forced into the burgeoning urban areas by wealthy landowners.

Make no mistake about it, these changes to HB will cause profound social upheaval. The particular policy of capping the amount of payments to a third of ‘market’ value (down from a half) from next year, was what Johnson had in mind. In wealthy parts of London, HB claimants will be unable to afford private sector rents, and so will be forced into cheaper areas of the capital or outside of London altogether.

The Guardian newspaper reports that Haringey will suffer from an exodus in the wealthy western parts of the borough and an influx into the cheaper eastern areas, from claimants within Haringey and from outside more expensive boroughs. All this will lead to more pressure on other services, such as hospitals, schools and social services in the east of the borough, not to mention housing overcrowding, making these parts of Haringey more deprived than they already are.

Another change to HB which will cause social problems is the twelve month rule. HB claimants will automatically lose 10% of their benefit after twelve months, whether they are on Jobseekers Allowance or in low paid employment. How are these people meant to make up the difference when they are already on the breadline? Inevitably, this will lead to evictions and homelessness which in turn will lead to health issues and probably an increase in crime, at a time when police numbers, prison places and probation officers are all being cut.

Clearly huge sums are being spent on HB at the moment, but why punish the claimants when the problem is caused by a lack of affordable social housing and astronomical ‘free market’ rents in the private sector, in London particularly?

We are moving towards the kind of problems we saw in the 1980’s with poor ghettos becoming increasingly unsettled and a powder keg which exploded into urban riots in these areas in the end.

This is the ConDem government future, and it’s not going to be pretty.