Tax showdown looms

Sylvia Hardy is a woman to watch in 2005. She is the Council Tax campaigner most likely to go to prison for withholding some of her payments. 'The nearest women's prison is in Gloucestershire,' she said last week from her home in Exeter. 'So it would mean a trip to Gloucester.'

Unlike some of the other pensioner campaigners who were prepared to risk imprisonment for non-payment, Sylvia, 72, a former social worker for Devon County Council, can carry it through because she has no family: 'I am not going to be upsetting anyone.' She owes £63 for this current tax year - unpaid on principle because this is the gap between the increase in her pension and the increase in her Council Tax bill.

Events are starting to move rapidly. Bailiffs are now due to come to her house. She is then likely to end up in court again. Last year, an anonymous donor paid her debt for her - something she is not grateful for, since she wants to make an issue of the whole business. She expects that this year the council will accept that anonymous payments should not be made without her agreement. So jail may beckon.

Whatever happens to Sylvia, we will all be discussing Council Tax rises for 2005/06 soon. The government has just finished a campaign to encourage people on low incomes to claim Council Tax benefit in preparation for the setting of the rates, which will happen within the next 40 days (contact your local authority if you think you could be eligible). Final announcements by collecting authorities are due by 11 March.

The average annual bill is expected to top £1,000. Many pensioners are likely to be disgruntled. Council Tax rises and utility bill increases will probably eat up much or all of the £2.45 a week increase in the basic state pension in April.

But, of course, the issue is not as simple as saying that councils should freeze their rates or keep the increases low. The National Pensioners Convention, for instance, is worried that such a response would hit the elderly first. While some other areas of council spending are ring-fenced, the provision of home helps, day centres and even public toilets could be first in line to be cut by cash-strapped authorities.

The convention wants to see an income-based tax (as it is particularly concerned about the type of person who bought a house 30 years ago, finds it is now worth a large amount, but still lives on only £105 a week). A local income tax is being suggested by the Liberal Democrats - and other ideas are floating about, such as more VAT or a land value tax.

Although the villains of the piece can seem to be the local authorities, it is not really fair to blame them for a system imposed by central government and one which leaves them with very little room for manoeuvre. At some stage Council Tax will probably be reformed. People such as Sylvia Hardy are helping us by drawing attention to the issue. 'The prospect of going to prison does not worry me in the slightest,' she says.