The mother of all muddles

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The Independent Online
Governments cannot expect to impose fresh financial burdens unless their methods command respect. The poll tax and VAT disasters show that a tax will not survive general contempt. Yet this bitter lesson has not been learnt in Downing Street. Yest erday, it became clear that two new forms of quasi-taxation - the Child Support Agency and student loans - are also doomed. Both schemes are designed to save money by making individuals take over responsibilities from the state. Yet they are now so riven by unfairness and maladministration that neither can survive unless radically reformed.

The Child Support Agency has always lacked legitimacy. In making fathers take financial responsibility for their children, its creation was a progressive step. But the agency has offered few real benefits to children during its 18 months in existence. Many poor families are worse off than they were before the agency was established. The CSA has tracked down some errant fathers, but that has not made families richer. The only effect on them has been to replace dependable social security benefits with unreliable payments from estranged fathers.

Amicably agreed divorce settlements have been overturned by the CSA. Second families have found themselves impoverished by fresh financial demands from the first. As a result, huge resentment has developed against the CSA.

But the greatest damage to its credibility was done this week. The Government quietly announced its plan to abandon the investigation of 350,000 unresolved cases. In other words, those who have successfully evaded the CSA will escape the strictures that thousands of other law-abiding families endure. As a result, the Government has thrown the law into disrepute. Who can respect rules that others have been allowed to break with impunity?

The CSA might well have been fruitfully reformed: the Treasury could have been less greedy, leaving more money for families. Instead, the Government has merely introduced further injustice into the system. Dissent will increase. "Can't pay, won't pay" will doubtless become as familiar a cry as it was in the days of the poll tax.

The student loans scheme has also lost public respect. Like the CSA, it is in chaos. Today we report that many students have not been receiving their loans on time. Recent graduates have been hounded by heavy-handed bailiffs looking for repayments. Once

again, those who dutifully accept fresh financial burdens find that they are being treated in a high-handed fashion.

It is ironic that this government, which prides itself on its tax record, should continue to make the same mistakes when trying to raise money. But unless it taxes fairly and by consent, its string of financing disasters can only lengthen.