Tag Archives: summary warrant

Council Tax Freeze Failing the Poor

Council Tax Freeze Failing the Poor

If further evidence of the Scottish Government’s non-commitment to social justice is necessary, then one only need look today at the Annual Budget meeting of Glasgow City Council.

For the seventh consecutive year it will go through the formality of setting council tax rates. I say formality, as like many Glaswegians I have already received my bill for 2014-15 which sets the Council Tax rates at the same level they were at in 2006-07.

The Council Tax freeze is represented by the Scottish Government as a socially progressive policy which protects hard up families. However, there is now a growing body of evidence to show that’s what the Council Tax freeze is not doing.

Citizen Advice Scotland is reporting that although overall levels of personal debt are now falling, Council Tax arrears along with payday loans are increasing.

The Scottish Diligence Statistics for 2012-13 also show that over quarter of a million Charge for Payments were served on non-payers; whilst almost 203,000 bank accounts were arrested and 134,000 earning arrestments were executed.

When that level of formal debt enforcement is required in a country Scotland’s size, questions must be asked: are levels too high; or is the tax broken altogether?

I would say the latter.

The Joseph Rowntree Foundation has also warned that the true beneficiaries of the policy have been better off, middle class families and not the poor; whilst Local Government trade union, Unison, has called for Local Governments to be allowed to set the rates again, pointing to the fact the brunt of the freeze is being felt by cuts to vital services, which the poor depend on.

Others, such as Professor David Bell from the University of Stirling have delivered reports showing the most effective way for the Scottish Government to reduce inequality now, is not to freeze Council Tax rates, but to use existing powers to increase the gaps between Council Tax bands.

If the Scottish Government is committed to increasing social equality and avoiding the poorest facing rising personal debt levels, the evidence is clear: they would be better reforming local taxation law and using the powers they currently have, than sticking a plaster over a broken system; whilst wasting parliamentary time introducing punitive measures such as they are doing with Clause Four of the Bankruptcy and Debt Advice (Scotland) Bill 2013.

What we are seeing is the same lack of commitment or understanding that led to the unnecessary delays in neutralising the effects of the bedroom tax and the increase in application fees for Low Income, Low Asset Bankrupts (which it was argued at the time was necessary to generate an additional £460,000 of income, but then led to a 60% drop in the numbers able to apply in a year in which the Accountant in Bankruptcy then went on to report a £1.3 million underspend).

Two thirds of Scots have even said in a recent Mori Poll, presumably those that can afford the current rates that they would be prepared to pay more in local taxation if they were assured it was to be spent on local services.

The reality is the only other beneficiaries of the continued Council Tax freeze, other than better off, middle class families, are the Sheriff Officers who are now being paid millions by local tax payers to collect debts that simply many cannot afford.

Enforcement of Debt (Scotland) Bill Required

By Alan McIntosh

John Wilson, MSP, Enforcement of Local Tax Arrears Bill proposal has opened up an important issue in Scotland regarding the enforcement and extinguishing of the obligations of debtors to repay their debts.

Scottish Debtors are currently at a disadvantage to debtors in other parts of the UK, in that debts can be pursued in Scotland for longer than they can in England, up to twenty years or more, once a court order or its equivalent has been obtained. In England, there is no automatic right to enforce a debt using legal enforcement (or distress) after 6 years. This encourages bad practice in Scotland, meaning bad debts can be held over people for an extraordinary long period of time. This encourages debt purchasers who buy debts, sometimes for pennies in the pound to then use the full force of the law to harass and persecute debtors who have reasonably assumed the original creditor has abandoned their right to pursue the debt.

John Wilson’s draft proposal concerned only local tax arrears and the pursuit of them using the summary warrant procedure, which only local authorities and Her Majesty’s Revenue and Customs can use. The debate, however, should be wider and look at the enforcement and extinguishing of a debtor’s obligations to repay all debts.

I would call for:

  • The prescriptive period for enforcing local tax arrears being reduced to five years;
  • Debtors having a statutory right of recall when served by a summary warrant by local authorities or Her Majesty’s Revenue and Customs Department;
  • That no court decree for payment of money, or summary warrant, should automatically be enforceable after five years, unless the creditor can show exceptional circumstances for not enforcing the debt earlier; and
  • That local authorities and HMRC,  who use summary warrant procedure, being allowed to enforce debts constituted by summary warrant  by executing and registering inhibitions on the property of debtors.

My full paper, The Enforcement and Extinguishing of Debtor Obligations in Scotland can be read here.