Cameron commends 'Kirklees model' where young pay for older residents' council tax rises

In his speech (a pdf of which is here) yesterday to Age Corncern the Tory leader highlighted a scheme run by Tory-run Kirklees council that shifts the burden of rising council tax from pensioners to younger residents. 

For next year's budget Kirklees Council of West Yorkshire plans to levy only a 1% increase on pensioners but a 5% 3% (correction at 11.42am) increase for other council taxpayers.  Mr Cameron praised the Kirklees scheme as as "a great example of civic responsibility":

"The whole point is that it is a local idea... Kirklees council has decided to use its powers to introduce a lower council tax for pensioners. They register and will get a guaranteed small fixed increase of no more than one per cent.  The burden of doing this falls on other households, but the registration scheme helps the council ensure that more older people get the benefits they are entitled to. That's just the sort of initiative I believe in."

Mr Cameron's speech also suggested that grandparents might be paid up to £175 per week to look after grandchildren (in order to "restore the relationship between the generations") and that house design should change to make it easier for older people to delay going into formal care.

Related link: Cameron bids to woo 'grey vote'

Comments

[anon]

So rather than propose an alternative to the Council Tax which reinforces local accountability (such enabling local authorities to set and collect business rates) we have more tinkering around the edges.

If I understand the proposal correctly I will be required to pay much more in Council Tax for services I do not use to fund a reduction in Council Tax for people who are more likely to use services than I am. Whilst I do not dispute that the Council Tax is a pernicious tax I worry about the trend that this is setting not to mention the additional inflationary pressure it places on the economy since for example my 5% increase in next years tax becomes a 7% increase to cover the deduction for the elderly.

How does Cameron suggest that this will win us votes with those Strivers who we need to attract back to the party?

Will the next announcement be on the benefits of collective farming whilst making references to increases in tractor production under a Conservative government?

I am trying hard not to feel depressed.

[Chad]

I'm sorry but that is plain bonkers.

Does Cameron not understand the phrase 'brain drain' as overtaxed younger people who are already doing so much to support the older generation decide to up sticks and bugger off to a lower tax country?

[bemused]

So just how does this fit in with the simpler, fairer taxation being promoted last week?

We need a compass for policy direction, not a spinning wheel.

[MH]

Anon / Chad - spot on. This is barking even by Dave's standards. That he and his little pet George cannot find the money out of the bloated, inefficient state machine that exists in the UK to fund this (in principle) laudable aim is shaming.

[Chad]

Think about it.

Because no-one has sought to control house prices (or proposed what is really needed - add them to the inflation target), young people are already financially crippled just to buy a home, and now Cameron wants to force them to be "socially responsible" and fork out more to help those who are sitting on a huge pile of equity.

Nice.

[sjm]

Sorry Dave, this is a wrong 'un. Him indoors and me are both pensioners, but we've paid off our mortgage and don't have young children to fund anymore. Why should those who are just climbing life's ladder with all the usual burdens have to pay for us?

More to the point is cutting council taxes so we're not funding some of the idiocies - like councillors' salaries and pensions, and inane bureaucracies (think LEAs).

[James O'Shaughnessy]

I have to agree with the above - and see Policy Exchange's recent report "2056: What future for Maggie's Children" (apologies for the plug). Today's under-25s are massively worse off compared to their baby-boomer parents: ridiculous house prices, failing pensions, university fees. And for those whose parents missed out on the Thatcher revolution? Well they're doubled screwed, because their parents will have nothing to pass onto them.

[DCT_tory]

The pertinent issue is not who pays what, but why council tax is so high in the first instance. Ten years ago we had a system of local government financing that was not perfect, but nor was it "an issue" in the way that it is now. Since then council tax has risen inexorably and yet local councils receive an ever greater amount of money from central government.

Rather than shuffling the deckchairs on the Titanic, the question of "what on earth do they need all this money for?" must be dealt with. Increasing costs of the local government pension scheme? Move to a money purchase arrangement. People employed in politically-correct social engineering "non-jobs"? Allow them to find more productive jobs in the private sector.

The other reason why this is a daft idea is because it means you have an ever increasing number with less of a stake in keeping the overall tax burden down. The fairest and most stable taxes are those spread across as large (and as varied) a population as possible. The solution therefore is to tax at a level acceptable to everyone - currently, this suggests a lowering of the council tax burden.

[Simon Chapman]

Tim,

It would be good to see the whole speech. The Party's website hasn't posted it in full yet, which is a pity. Any idea where to find a copy?

[david]

Couldn't agree more with most of the above comments. Many elderly people are sitting in properties for sentimental reasons. Four and three bedroomed houses they have become attached too which they no longer need. Council tax on smaller properties should be much reduced, on larger properties much increased, regardless on who is living in them. This will encourage people to move into smaller and more appropriate properties when they retire, reducing their outgoings and releasing larger properties for families. Younger people should not be penalised to help the old, they carry a large enough burden as it is.

[Daniel]

Here's a task for someone - Calculate just how mcuh tax Cameron think 's her can get from me. 40% income tax, NI, 10% Student laon repayment, 5% of my income on council tax. They'll be nothing leess. My wife is from the US and I can get a green card. What exactly is keeping me here?!

[RobD]

It seems to me that while the Kirklees option is an interesting solution to the local problem, on a national level we should be looking at the bigger issue. Council tax is unfair to more people than just pensioners and I hope that at the right time we will have a policy to simplify and control council tax in a much more efficient way than just taxing the young to pay for the old.

[More to the Point]

Watch this space: the Kirklees policy will be ruled illegal under the new anti-Ageism legislation (which cuts both ways) within the year.

[Sean Fear]

A truly rotten idea. Younger people will be trying to bring up families, and (if they've been to university) paying back student loans.

It is hugely unjust that they should pay extra council taxes to subsidise those who are, in many cases, better off than they are.

And, as others have pointed out, they can always emigrate.

[Andrew Kennedy]

Kent County Council floated a similar proposal 3 or 4 years ago - and quickly dropped it due to the political outcry and threat of legal challenges from the borough Councils who were responsible for collecting the tax.

The scheme is blatantly unfair as it assumes that "retired" households are poorer than "young families" when the opposite is often the case.

The proposal is bonkers. Graducated taxation based on assumed need.

[Sean Fear]

The scheme is blatantly unfair as it assumes that "retired" households are poorer than "young families" when the opposite is often the case."

In Hertsmere, it would be usually the case, that older people have much greater capital, and not much less disposable income, on average, than people in their 20s and 30s.

[Mike Christie]

So in additon to having to pay for their tuition fees, reap the whirlwind of Brown's pensions and PFI scams in the future younger people and carry the burden of public sector pensions also have to subsidise even more those who have had the benefit of the boom in property prices and generous pension schemes.

We have a falling birth rate due to the fact that young people just can't afford to set up a home and have children.

This just further distorts the housing market too, we should get away from the idea that older people moving out of the big family house they've lived in for years is somehow a bad thing!

All in all, this is a crazy scheme.

[Denis Cooper]

More to the Point @ 10:48 - I'm surprised that this scheme is legal even now. Of course there are council tax benefits or rebates which presumably are recognised in whatever national legislation determines how councils can levy the tax, but I'm rather surprised that the legislation allows a council to apply different percentage increases in the basic council tax rate to different categories of residents.

[Richard]

This is demented for all the reasons outlined above. Furthermore it will simply create resentment between the generations. As someone asked above, why is council tax so high?

[Roslyn Freeman]

Does Cameron, the multimillionare, who is so out of touch with the people and his dwindling party membership not understand that what the people want is TAX CUTS, ECONOMIES,EFFICIENCY.NOT BLOATED GOVERNMENT,LESS RED TAPE,LESS INTERFERENCE,NO GIMMICKS,NO SOUND BITES,REAL LEADERSHIP etc..

That man is just scavenging around for the next nice thing he thinks is right to say.

Does he not understand that the young are burdened already with a millstone of Housing costs around their neck.

[Jon Gale]

This is a really bad idea. The more I think about it the worse it gets.

5% increase in most people's council tax? Was this scheme bizarrely popular in Kirklees or something?

[Sally Roberts]

We have to do something to solve the problem of pensioners being unable to afford their Council Tax - but this isn't the way to go about it! Not every younger person is well off financially and in addition the points made about possible "brain drain" are good ones. The younger people will simply move to another area to leave the "grey ghetto" that David Cameron has been talking about. Back to the drawing board, I'm afraid!

[alex r]

I am increasingly unsure if I can actually vote conservative at the next election.

What would be the difference between voting for Brown and having your taxes raised or voting for Cameron and having your taxes raised?

It's alright for cameron and osborne, they've got money. An extra couple of pounds here and there mean nothing to them, but to some of us it increasing makes the difference between having a summer holiday or not.

Please don't tell me that somehow tories run things better than labour do. that's just nonsense. I mean, it's not as if the tories have any great management experience behindt them: cameron as a pr man; and osborne as what?

[More to the Point]

What was that I remember about leadership candidate Cameron swearing he'd never 'bandwagon' a la Hague, IDS & Howard?

[Sean Fear]

Well, I think this idea is struggling.

It would be interesting to see if anyone is actually prepared to defend it.

[anon]

Anyone else noticed the striking similarity between Policy Exchange's recent report "Maggie's children" and the report "the Ipod generation" from Reform published over a year ago which first highlighted the plight of the younger generation?

[anon]

so i'll be much better off under a labour government now?

i can see every 20 and 30-something in the country, except old etonians obviously, feeling sick at this policy.

[anon]

so i'll be much better off under a labour government now?

i can see every 20 and 30-something in the country, except old etonians obviously, feeling sick at this policy.

[Justin Hinchcliffe]

It's a bonkers idea. It's also, as somebody else suggested, potentially illegal under the new law. We ought to have a review of local governmnet taxation - the Council Tax isn't a winner; it was just more popular than the Poll Tax (as was Pol Pot).

[Roslyn Freeman]

This is clearly not thought out and is discriminatory under the ageism laws of this october 2006.
It can be challenged along with FREE eye tests,FREE dentisty,FREE bus passes,Subsidised rail,FREE TV licences,Half price meals in pubs and restaurants etc etc.

A hornets nest opened up by a Teddy Bear of a Leader.
Put bluntly it is just not on----Cameron should be looking for Economies in local government not expenditure.

[Sean Fear]

I would guess that even without recent legislation, a move of this type is open to legal challenge.

[William Norton]

Sean Fear: will anyone defend it?

I will, in a roundabout way.

I wouldn't have done it myself, but I can see where Kirklees are coming from. It's a little known fact that buried away in the council tax legislation is a facility to offer discounts to specified groups of people - for example, special constables (which I think is a more defensible idea and in Tower Hamlets this May that was one of our manifesto pledges as our way of reversing the dire local policing and recognising volunteers who contribute to their community; I don't think we were the only ones to push the idea).

The facility doesn't get used for the obvious point made on this thread - who chooses which group is favoured (and the fact that on the whole councils don't want to forgo the cash). An across-the-board OAP rebate isn't perfect but its more practicable than trying to run what would be in effect a local income tax and limiting the rebate to poor OAPs.

I'd be interested to see how it fares under the Age Discrimination Act. If it gets past that (which is anyone's guess) it could still face the same sort of legal challenge as Red Ken's bus fares policy in the 1980s - but my guess is that Kirklees are probably safe on the rationality etc grounds which would apply to a usual judicial review.

In summary: if Kirklees want to do this sort of thing, I say let them get on with it. I don't live in Kirklees. I don't have a vote in Kirklees. It's none of my business how Kirklees wants to set its council tax.

[Editor]

Simon Chapman:

I've prepared a pdf of the full speech:

http://conservativehome.blogs.com/torydiary/files/david_cameron_ageing_speech.pdf

[david]

I would remind Justin, everytime that there has been a change in local taxation, it has nearly always made the situation worse not better. Tories in particular should be very wary of this issue, there are those who have still not forgiven them for the disasterous 1974 re-organisation of local government, probably one the worse pieces of legislation that any government has ever enacted. In country where land is very expensive, we will have to consider two things, 1. releasing more land from agriculture for development. 2. Taxing larger properties much more highly than smaller one, i.e. flats, terraced properties would be at very low local taxation rates.

[TomTom]

Outrageous ! I hope Kirklees Council gets an outing in The High Court for age discrimination.

This is exactly how Brown justifies tuition fees for students so they can fund nursery places.

This form of taxing Peter to pay Paul is abusive and outrageous. There are 20 million people over 50 years old in Britain..........does Cameron think the regressive Council Tax should be banded on age rather than ability to pay ?

[Sean Fear]

But why should OAP's be favoured over and above young people, William?

Typically, the former are capital-rich and income poor, while the reverse is true for the latter.

[Stephen Yeo]

This is what he said:

Finally I want to publicise an initiative which I think is a great example of civic responsibility.

I should emphasise that this has nothing to do with the Conservative Party nationally – and I am not proposing it as government policy.

The whole point is that it is a local idea.

Kirklees council has decided to use its powers to introduce a lower council tax for pensioners.

They register and will get a guaranteed small fixed increase of no more than 1 per cent.

The burden of doing this falls on other households, but the registration scheme helps the council ensure that more older people get the benefits they are entitled to –

…and so more money comes into the area.

They’ve found a local solution to a cause of national concern.

That’s just the sort of initiative I believe in.

The policy wouldn’t work everywhere, of course.

But flexibility and social responsibility should be the watchwords for local government across Britain.

so its not a reason to change your vote yet!

However, I do wonder whether Kirklees are on the right track. Not only is such localism subject to legal challenge, but we already have a very elaborate national system designed to ensure that poor people can afford their Council Tax - it is the means-tested Council Tax Benefit.

At the last count, take-up of Council Tax Benefit amongst pensioners was below 60 per cent and falling.

Surely a better call would be to urge poor household (including pensioners) to claim their benefits and to criticise the Government for their shocking performance in this area.

Anyone who is familiar with the distribution of income across pensioner households will know how skewed it is. Providing blanket help, Kirklees style, actually accentuates the skew because better off pensioners will tend to live in bigger houses and pay more Council Tax.

[William Norton]

Sean - agree entirely, and I expect if we were both Kirklees councillors we'd have voted against it. But as I say, if Kirklees Council want to do it then I'm happy to let them face the voters of Kirklees on this one.

[anon]

Editor I have just read the text of the speech. The opening lines convince me further that we are merely going round addressing focus groups

"Last week I made a speech about the situation of disabled people.
Next week I’ll be talking about teenagers and young adults."

I can see the PR boxes being checked as we go along. Whether the whole thing adds up to a coherent policical strategy is obviously not being considered, and as for next May's elections well who knows?

[Jack Stone]

We need to do two things with council tax. Firstly we need to make it fairer, at present, in many cases, it results in poor people paying a lot more than those on decent incomes, and secondly we must bring council spending under control.
The only way to make council tax fairer is in my opinion to bring in a local income tax. It may be a Liberal policy but I am afraid that shouldn`t stop us supporting it as I think its right.
You will only control council spending by making our councils more accountable. I would like to firstly see any budget that increases spending by a percentage larger than the rate of inflation be made to put to a referndum of local people. I would also like to see twenty per cent of councillors up for election every year and I do believe that a system of proportional representation in local government that would end this nonsense we get in some areas where there is literally no opposition on the council would help make councils more accountable to the people who vote for them and encourage them to keep there spending under control.

[UK Daily Pundit]

Is there anyone that David Cameron doesn't want to hug? He'll be teaching the world to sing next. In perfect harmony.

[Afleitch]

As a recent graduate who will probably end up paying 55+% of my income for the next half decade in tax, due to tuition fees, high general taxation and paying for my parents generations mismanagement of the pensions system while getting nothing from the welfare state in return, then no I'm not happy at this.

[Andy Stidwill]

I'm sorry, but why on earth should young people (who are already the most overtaxed generation in history) effectively pay for the holidays of retired people, who are actually the richest section of the population?

This is ridiculous. But it's what happens when young people don't bother to vote. Hopefully they'll start to do so in the future.

[Chad]

"But why should OAP's be favoured over and above young people, William?"

Well I'm sure we'll agree that the honest answer is simply that yesterday was the OAP's turn on Cameron's carousel of spending/tax promises.

The young 'uns will get their turn soon I'm sure.

[James Hellyer]

An across-the-board OAP rebate isn't perfect but its more practicable than trying to run what would be in effect a local income tax and limiting the rebate to poor OAPs.

The thing is, the poorest OAPs wouldn't even benefit from the Kirkless model, as they are already generally exempted from making any payments, as they'll be in receipt of Council Tax Benefit.

I expect if we were both Kirklees councillors we'd have voted against it. But as I say, if Kirklees Council want to do it then I'm happy to let them face the voters of Kirklees on this one.

I have a sneaking suspiscion that the people most likely to benefit from the Kirkless proposal are those who are among the most likely to vote in elections...

[More to the Point]

Given that Chad's here and posting, if he had lost his EPP cheque, we can safely assume the cheque would have bounced.

[Stephen B]

Sorry to be all high-brow but could you defend it from a Burkean 'inter-generational contract' perspective?

[More to the Point]

Given that Chad's here and posting, if he had lost his EPP bet, we can safely assume the cheque would have bounced.

[anon]

Chad, read my comment at 12:09. Young people are next week when do doubt we will be informed of how there will be more training, better opportunities, and new for disaffected youngsters to participate in.

[RobD]

Well I am much relieved now I have seen the actual text. What David appears to be saying is that he wants to enable local people to come up with innovative solutions to their problems. This seems like a truly conservative, small government policy and is in my mind therefore a good thing. We may not agree with the Kirklees policy but we should empower local government to make more proposals and be judged by the local electorate.