One of the more far reaching but overlooked parts of the government’s Housing and Planning Bill is the provision for HMRC, the government’s tax collectors, to share information with your local council. Information sharing may sound benign enough, in reality this will allow local authorities to spy on vast numbers of people.

The provision relates to the infamous ‘pay to stay’ clauses of the Housing Bill, which is currently in its final stages in the House of Lords. This new law will oblige local authorities to charge higher rents to council tenants if they are classed as ‘high income’ (what exactly high income means is to be set out in secondary legislation, but the government consultation had an income threshold of £30,000 per household).

This is not the first time variable rents have been tried in the world of affordable housing. Jane Jacobs, the great writer on urban America described the crushing social impacts of variable rents in US public housing. In her book, The Death and Life of Great American Cities, she describes how families living in public housing would not socialise with eachother, for fear of a neighbour spotting a nice new pair of curtains or other household object and reporting the householder to the rent officer.

Mass surveillance of council tenants

The problem with variable rents is that to work the landlord needs to know details of their tennants’ incomes. The mechanism for doing this proposed by the government in the Housing and Planning Bill is for HMRC to provide that information.

The legislation as currently drafted states:

HMRC may disclose information for the purpose of enabling a local housing authority to determine whether it is obliged by rent regulations to charge a tenant a specific level of rent and what that level is.

Although HMRC already have many information sharing agreements with a number of government departments and agencies, they are highly proscribed, and often only allow the sharing of general data in order to help with the development of policy. In general terms HMRC is largely prohibited from sharing the tax details of any individual person or company with anyone outside the agency. There are exceptions, but these are normally concerned with law enforcement where there is a criminal investigation underway.

What is important about the Housing Bill is that the usual confidentiality and privacy obligations of HMRC are being blown apart. The legislation requires councils to charge higher rents on any household on a ‘higher income’ and so it is difficult to understand how it can work without HMRC passing on details about the incomes of a vast number of council tenants to their local authorities. At the very least, the HMRC will need to inform local authorities of the income of everyone who is seen to be ‘high income’. With high income being set at £30,000 per household (or two earners earning just above the minimum wage) that will mean most people with a job.

Double Standards

The prospect of government handing over the personal details of so many people to local councils, organisations not universally known for their high levels of competence and professionalism, should scare everyone. But the double standard should also enrage you.

The government says it takes taxpayer confidentiality seriously, so much so that HMRC says it is prohibited from disclosing any details of deals done with multinational companies like Google and Starbucks.

These companies have incomes of hundreds of millions of pounds, if not billions. They are clearly more profitable in the UK than their UK accounts would have us believe, and yet deals cut between HMRC and these companies see them paying a fraction of the taxes they probably should. HMRC resolutely refuses to disclose any information on these deals, even to government ministers and Members of Parliament who have to formulate policies designed to tax these multinationals.

But apparently the government is fine with the idea of local council officials being able to spy on the personal income tax data of every council tenant in their area.