Cassandra 2012 Headline Animator

Friday, 16 December 2011

Ireland's Household Charge - the Final Straw for Hard Pressed Citizens?

The first of January 2012 sees the introduction in Ireland of a charge of €100 per annum to be imposed on every occupied house in the land. In theory this is supposed to be a payment towards the cost of services received by the occupants of the house. In fact it is nothing of the sort. To understand why it is necessary to look at how such services are currently funded.

In Britain in the 1980s Margaret Thatcher attempted to introduce a similar charge levied from every adult member of a household. Officially called "Community Charge", it was quickly dubbed "Poll Tax" by press and opposition parties and was widely regarded as grossly unfair. It soon met considerable resistance with rioting and widespread refusal to pay. It was not long before the idea was dropped and replaced by a "Council Tax" based on the notional value of a property.

There are a number of differences between Ireland's new Household Charge and Britain's former Poll Tax but the most significant of these is the fact that whereas the Poll Tax was a replacement for an existing levy the Household Charge is entirely new.

In Britain householders have for many decades paid a contribution to the cost of operating local government. The Poll Tax was an, albeit unsuccessful, attempt to replace an unpopular tax called "rates" - essentially a levy based on the assessed rental value of a property. Rates provided a significant proportion of the funding for local government at a time when local councils in Britain had significantly greater powers than they presently do and far more than any in Ireland.

Unfair and Undemocratic
The system was regarded as unfair because based roughly on the size of a house whereas in many instances a large house that may once have been occupied by a family now grown up could still be occupied by a single elderly individual who would be paying more towards local services than a large family in a smaller house in a less salubrious part of town. The Poll Tax attempted to remedy this by charging every person of voting age the same amount. Families with grown-up children living at home suddenly had to pay more than they had been under the old system. Because it was possible to evade the tax simply by not registering to vote it was deemed undemocratic.

Council Tax was, and remains, based on the notional value of a property but was, and has been further, ameliorated by an increase in the contribution of central government funds to local authorities together with the removal of some of those authorities' more costly responsibilities. But the tax is set and collected by the local authorities.

Local government in Ireland is presently funded part by central government and part by business rates. Moreover County Councils in Ireland have far fewer responsibilities than their opposite numbers in Britain. People already pay for refuse collection services, for example, and in most areas these are privatised. There are charges for other services - libraries, leisure centres and municipal theatre performances - and whilst these are subsidised and therefore lower than corresponding private sector facilities there is an inevitable feeling that this new levy means people are paying twice.

Prisons Overflowing
This feeling is not helped by the fact that the new charge is part of a large package of increased taxes and charges levied in the recent budget and therefore not obviously a new way of funding local services. Unlike the British Council Tax it is set by central government so there is no sense of local control over the amount or the way it is spent. It is a levy that had been signalled by the previous government with an underlying assumption that it would be offset by a reduction in other taxes. The new government seems to have used it as a means of keeping their own promise not to increase income tax. Having broken so many other promises, it might have been better had they broken that one as well instead of introducing such a regressive tax at a time of widespread hardship.

Many citizens - including several members of the Irish parliament - have vowed they will go to prison rather than pay. In itself this is a frightening prospect for it is already the case that the only way our prisons can accomodate the people that the judiciary send them every day is by the early release of existing inmates. So we could see the imprisonment of innocent citizens whilst hardened criminals are released onto the streets. There is a growing movement to oppose the charge. Many see it as the last straw in an ever increasing series of impositions on a hard pressed population. It will do nothing to assist the achievement of a "yes" vote in any referendum on measures to defend the Euro. Time for a re-think, Mr Kenny?

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