Taking the rates heat out of the prices freeze
Molly Meacher
After the recent emphasis on fairness for the lower-paid, the rates crisis has presented the Government with a nasty obstacle. Apart from the general concession of increasing the central government grant used to reduce the rate poundage levied on householders, Ministers have pointed to rate rebates as a way out of the dilemma. Recent evidence however suggests this may be a non-starter.
From figures given by the Minister for Local Governinent and Development in the Commons debate on January 30, it is clear that for the current year the average domestic rate bill on which rebates are claimed is £40. Now the Minister has also indicated elsewhere that there are some forty two county and London boroughs where householders can expect " more than marginally increased payments on average" because of the rating revaluation. This embraces about a third of the total population of the country and the rate increases for householders in these areas range up to 15 per cent in Sheffield, 16 per cent in Birmingham and 19 per cent in Wolverhampton.
For poorer householders therefore with a £40 rate bill, a 10-12 per cent increase would push up their charge by 8p-16p per week. It is they who Ministers hope will be assisted by rate rebates, and on January 30 the gross income ceiling up to which low-paid workers remain entitled was raised to £22 a week for a married man with two children. Now the Government's latest earnings survey reveals that in April 1972 there were 2.9 million men with gross earnings, including overtime, below £22 a week. Of course not all, or even most, of these have two children, so that their entitlement will vary, but it does suggest that a large number of low-paid workers may be eligible for rebates. Experience however tells a very different story. Probably only about 30,000 low-paid families are currently receiving rate rebates, including about a third who are single-parent families. Almost certainly the great majority of these are unemployed or long-term sick, and the number of families with a head in full-time employment who are in receipt of a rate rebate is virtually negligible — perhaps around 0.01 per cent of the total work force.
These tentative conclusions are drawn from a survey carried out in Islington in March and April 1971. At that time the Department of the Environment undertook, as an experiment, a major advertising campaign in the area to promote the take-up of rate rebates. Just before this a CPAG team contacted a crosssection of 222 households who had been pre-screened as eligible by a market research organisation out of 2,300 households originally chosen. They found that only 12 per cent of those eligible for these rebates were getting them. The most disturbing finding, however, was •that it was precisely the very poorest who were least likely to claim a rebate. But not only did those who failed to claim have the lowest incomes of all; they also tended to have the most cramped housing conditions, and to be paying more rent for their homes than were families and old people who had claimed their rebate entitlements.
Perhaps it might be said that these findings were more striking in Islington than they would be in a suburban area in view of the large immigrant population in Islington who tended to have very poor housing conditions, high rents and much less inclination to claim benefits than their English neighbours. But in fact the same pattern was repeated amongst pensioners who were all British. It was the elderly couples who owned their houses, perhaps receiving a few pounds per week in rent as landlords, and who had adequate space, who tended to claim rate rebates. At the other end of the scale were elderly couples who rented a few rooms privately and to whom a rate rebate would have been of great value but who didn't realise that private tenants could be entitled to rebates. Others were aware of their entitlement, but were prevented by fear of the landlord or their own pride from approaching the Town Hall.
Even the advertising cam-paign only had real impact among the better-off — a fact which must cause some doubt about its effectiveness in the case of other means-tested benefits. Awareness that the advertising campaign was taking place was registered twice as much among those already claiming as among nonclaimants.
A second main paradox we found was that rate rebates were offered on terms which virtually excluded those they were designed chiefly to help. For they amount to very little for households living in only a few rooms. Even though the rent may be high, the halfyearly rate bill will come to only a small fraction of the rent, thus making a claim for a rate rebate genuinely not worth the trouble. We therefore find the ironic situation in which many families are too poor to qualify for a rate rebate.
'For example, Mr and Mrs Jones in Islington live in one room with their two small children. They have a small kitchen only large enough to cook in and the family share the bathroom with the twentytwo other tenants of the house. The rent is £4 per week and the couple were unaware what portion of this constituted the rates. Clearly, however, with so many other people living in the building, this .family of four would not pay more than £5 rates for the half-year, and would therefore be entitled to a rate rebate of no more than 75p for the half-year, or a mere 3p per week, which was scarcely worth claiming. Yet with a gross income, including• family allowance of £14.90 per week, this family could not afford the higher rent for better accom modation, which alone would have commanded a rate charge that would have made claiming a rebate worthwhile.
Consequently, hardly any working families actually get rate rebates. Before the advertising campaign a mere 3.6 per cent of claimants were low income families, and after it the number rose only to 6.1 per cent. Nine out of ten claimants were retirement pensioners, and the remainder mainly middleaged widows without children.
The third disquieting discovery was that this failure to claim rate rebate entitlements was not exceptional, but rather part of a general pattern. The number of eligible families claiming similar benefits varied from 37 per cent (school clothing allowance) right down to a mere 6 per cent (exemption from dental charges). Ignorance of entitlement was extensive; leaving aside free school meals which are almost universally known, between two-fifths and two-thirds of eligible families were unaware of every benefit (including free welfare foods, free milk, and exemption from prescription charges). Yet ignorance was not the only factor, for between 12 per cent and 26 per cent of eligible families, in the case of every benefit, were aware of it and knew they were themselves entitled, but for other reasons refused to claim.
One factor closely linked with ignorance of entitlement was the complexity of form-filling required. This could put off particularly foreign families, unskilled workers and isolated elderly persons. But after ignorance had been eliminated by the interviews themselves, still 55 per cent of households eligible for rate rebate failed to claim, according to a later follow-up survey. In a third of cases this was because the benefit was considered too small. A fifth were deterred by pride and fear of stigma. A quarter were anxious about upsetting the landlord or disliked divulging personal information to Town Hall officials. And a quarter were inhibited by a . common experience of the mishandling of their past claims.
What these findings therefore indicate is that even a well-financed, well-organised and imaginative publicity campaign by the Government is unlikely to increase the take-up of rate rebates (or any other means-tested benefit) sufficiently to protect the very poorest in our society. The £i million spent on promoting the family income supplement, with only 50 per cent take-up success, is another indication of that. Guaranteed help to lowpay households with their rate bills requires a deeper reform of the rating system itself. Perhaps therefore, along with the revaluation, the Government might consider imposing a scaled charge on three or four succes
sive bands of rateable value, wit'h a much lower rate charge applied to properties in the band of lowest rateable values. Fairness to lower-paid workers over the rates surely requires such a commitment.
Molly Meacher, wife of Michael Meacher, MP, is active in the Child Poverty Action Group.
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