Today David Cameron will make proposals to remove the Westminster set cap of Council Tax and replace it with an annual increase and rules that say if a Council wants to raise the tax any higher there should be a local referendum. Now I'm not 100 per cent sure such an idea will have an effective outcome practically because asking people if they want to pay more or less tax is a bit like asking them if they want to have a red hot poker shoved somewhere or not. For the altruism of the Left ideologically when it comes down to even their wallets they're just like everyone else (see the Benn's and Miliband's and their inheritance tax planning for reference). The end result of a referendum process would seem to be that the annual rise would just become standard anyway, but local people would feel they had a say; but at what expense would a referendum be?
Having said this, what are the other alternatives? One of the other ideas on the table from opposition parties is a local income tax from the Lib Dems that I imagine will be mentioned in their reactions to Cameron's proposals. However, let's be fair, the local income tax itself is a pretty silly idea because what it would produce across the country would be tax traps and tax havens. Take this as an example, Buckinghamshire is a pretty rich place, the average wealth across the county is high. It has a well-established Tory council that is unlikely to change. They're likely to be an area that will have low local income tax as a result. Meanwhile somewhere like Tower Hamlets is pretty poor with a largely low-income population. In order to provide the relevant services they would have to have a high rate of local income tax on that poor population.
It seems to me that the local referendum idea would only work as a control mechanism against excessive rises rather than a solution to making Council Tax less hated. The real solution is to ask the question why so many Council's need to raise the tax by so much. This usually comes down to two things. Firstly bad spending controls and second, at least in the case of London, the fact that the Mayor takes ever more money from the Council's in his precept. Council's then have no choice but to cover the short fall. What would be more effective would be devolving further the control of some spending decisions to ward level. Better spending management is the key to making Council Tax rises more acceptable. We need to break the fallacy that spending more is equal to achieving improves ends. It is not always the case.
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"We need to break the fallacy that spending more is equal to achieving improved ends. It is not always the case." - Thereon rests our entire cause.
Allowing councils to set their own taxes, and allowing them what taxes to choose is right in principle. If Bucks want to go for income tax, and Lambeth want to go for a poll tax that should be up to the elected councillors (or better yet mayors) in those areas. A bit of competition on business, property or income taxes would be a good thing.
Don't the paupers of Tower Hamlets probably already pay a higher proportion of their income in Council Tax than the denizens of Bucks?
Setting the councils free is a good idea, and Cameron's referendum idea is a good release valve to stop voters being scared of what their councils/mayors might do. Once the system settles down, Parliament can set the "bar" high and let the voters decide at local elections whether their council has taxed too heavily.
For my council tax has risen because the grant has not. Well, OK it has from £6.3 million in 1997 to £6.4 million now, but obviously costs have gone up what with wages, increased pension liability and the requirement to provide more and more services.
What annoys me now is that we have to pay enormous sums to the Council and then when we actually want something from them we have to pay extra on top. So let people pay for charges for the services they use; that way we would see pretty quickly what services people really value. So: charges for parking permits, skip licences, waste collection, planning applications etc. If you use local schools you pay a charge. If you don't you don't pay. There should be a basic minimum payment for services such as the police/fire etc but only for those services where a specific charging scheme won't work and which everyone benefits from. And get rid of all the rest of the services that exist purely to provide jobs for the local authority boys but the rest of us don't need or want. This really would put power in the hands of people rather than the bureaucrats. The LD proposal for another income tax is a nightmare: I only have one income, already pay 2 income taxes on it - income tax and NI and have no intention of paying a third.
Key question "why so many Council's need to raise the tax by so much."
For many councils the answer is they have so many responsibilities dumped on them by Westminster's (and Brussels's) legislation production line, and they are obliged - or believe they are obliged - to discharge them in a hopelessly inefficient way by 'best practice', PFI, etc. In other cases they put an ideological agenda ahead of their basic purpose of cleaning the streets etc, so naturally they want more money.
To strike at the root, we need to roll back local council responsibilities, roll back central and EU government interference in the remainder, and boot out the ideologues. (I'm not holding my breath).
There's no point in holding your breath Steve because the council would only employ a breathing cessation officer to help you out.
It is partly down to the councils having more responsibility dumped on them, but it's equally that we have become so reliant on government services that we're in a kind of super-nanny state.
I worked for many years in commercial printing, we were an approved supplier to the local council and believe me, there's too many services, some very odd ones that most people don't even know exist (state funded hand massages and free coffee for heroin addicts) and crazy stuff like multiple language version of basic forms.
Councillors don't have to worry about that, because come election time they campaign on streetlights, community centres and public toilets.
Actually what causes council tax to go up are stealth taxes, extra burdens on local government and a chronic underfunding of councils.
When I was a councillor in North Norfolk our council was chronically underfunded compared to the neighbouring authority. Our council had tourists areas and therefore Tourist Information Centres to run, our neighbouring council had none (not a tourist area). We had to spend money on coastal protection (out neighbouring council had no coast) we had a problem with second homes not paying the full amount (they only pay 90%), our neighbouring authority had few second homes, indeed, our neighbouring authority had few of the problem we had. yet if we had received in North noroflk the same grant that neighbouring breckland got, we could ahve cut council tax by 32%.
When you take in to account stealth taxes like extra bins collections in order to help mkeet targets the government had set. When you consider the effect and cost of council now having to do licensing, and a host of other things that have not been fully funded it is a wonder we kept council tax rises so low (indeed since the Lib Dems took control North Norfolk has had the four years of lowest council tax rises in the council's history).
So don't follow the Tory line of always blaming high spending councils. It is rarely the cault of the council at all.
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