Jenny Morgan is a disabled widow, a pensioner receiving pension credit who contacted The Big Issue because she is losing her home over council tax debt. She has long disputed the debt but cannot afford her own lawyer. On April 3 a court in Birmingham granted an application by Warwick District Council to sell her home. The sums claimed against her have been repeatedly changed over the years. Only twice, in two hearings in 2015, was Jenny able to obtain any free representation. In every other complex hearing, before different courts and tribunals at stages before and since, she has been alone. For when it comes to council tax there is no one to represent numerous people in Jenny’s position.
The sale of Jenny’s home looks set to proceed, despite the council being unable to produce the magistrates’ court order it claims to hold justifying its enforcement stance. Nor will her council admit just how much it has spent on pursuing her.
For Jenny, the assumption at every stage by MPs and the media (her story has been in Private Eye and on the local BBC radio), and mouthed by many well-meaning officials in a variety of public bodies, is that there exists a source of advice and free legal assistance that can help her. Surely, an organisation like Citizens Advice, National Debtline or a charity can assist taxpayers?
The blunt truth is that there is not. Though mistakes can be legion in the enforcement of council tax, taxpayers caught up in technical processes such as liability order hearings, charging orders and bankruptcy are effectively alone. The complexity and long drawn-out nature of proceedings prove far beyond what the Citizens Advice, National Debtline or any other debt advice charity accessible to the public can understand or cope with.
‘Peter’ (pseudonym) found this in 2015. He was living in India, his income coming from renting out his property in the UK. Suddenly he discovered all his money had dried up, having been bankrupted in his absence by his local authority back in England.
His tenants had failed to pay the council tax due and then disappeared. Even though it had not been his responsibility to pay, he was plunged into the nightmare of personal bankruptcy. Like Jenny Morgan, he was never shown any original liability order. And he also found there was no UK agency offering advice that could help him.
“It took me six months to even find someone who could understand what the issues were,” he said, “and then no advice at all for anyone at all who had reached the point of having been passed to a trustee in bankruptcy arranged through the Insolvency Service.” Eventually, Peter’s relatives raised £20,000 to pay off fees notched up by insolvency practitioners, again greatly in excess of the original alleged debt. This enabled him to escape from his bankruptcy.
We like to image we’ve moved on from debtors’ prisons. But the reality is very different for those snared in tax enforcement
Until 2010, some legal aid did exist for people in this position to cover appeals to the High Court.
Today, as cash-strapped councils are turning again to draconian measures such as imprisonment, the sale of homes and bankruptcy, legal aid provision even for the most vulnerable has all but evaporated (even presuming there is to be found a lawyer with the necessary knowledge and expertise to take such cases). Human rights questions abound but there is frequently no one to be found who can take them.
Such enforcement proceedings can strike anyone. In 2005, entrepreneur Danny Bamping won an edition of the BBC’s Dragons’ Den series. In 2014 he lost his business to a council tax bankruptcy initiated by Plymouth Council for a debt of just over £2,000. Danny has since obtained a law degree, and now is trying to challenge both his own bankruptcy and errors occurring in enforcement, particularly the imprisonment of other taxpayers.
Many things contribute to this invidious situation. The council tax system is far too complex and fragmented for the public to deal with. As Lord Justice Wall pertinently commented in the Court of Appeal in a benefits case in 2009: “In my view it remains an apparently non-eradicable blemish on our operation of the rule of law that the poorest and most disadvantaged in our society remain subject to regulations which are complex, obscure and, to many, simply incomprehensible.”
The Big Issue magazine is a social enterprise, a business that reinvests its profits in helping others who are homeless, at risk of homelessness, or whose lives are blighted by poverty.
Even many of those administering council tax do not understand the processes into which debtors are thrust. Such bureaucratic blindness is encouraged by local tax recovery often proving a lucrative source of revenue and profit, whether in added court costs, bailiff charges or insolvency fees.
But perhaps the biggest contributor is the wider inability to believe that such things are actually happening.
In public life, we like to imagine we’ve moved on morally from the Victorian era, from debtors’ prisons and Oscar Wilde’s Ballad of Reading Gaol. Politicians and public bodies of all shades proclaim commitments to equality agendas and respecting the rights of everyone. But the reality proves very different for those who become snared in council tax enforcement processes, as they operate in local courts, at the behest of local councils claiming liability orders that increasingly cannot even be produced for scrutiny.
Alan Murdie, LL.B, Barrister, is editor of the Council Tax Handbook (published by CPAG), chairman of Nucleus Legal Advice in Earl’s Court and director of Council Tax Legal Services