Henry Smith is answering questions in the Crawley News this week. His answer to most questions is, as always, that everything is the government’s fault.
When it comes to local taxes he says that there is little link between local taxation and representation. He complains that business rates go into a national pool and are redistributed according to need. He says that “business rates and council tax are broken systems of local taxation” and that “we need to scrap the current system and replace it, etc. etc.”
Was he saying that in 1992 when his lot introduced the council tax to replace thir disastrous poll tax? Was he saying it in 1988 when his lot introduced the business rate?
I’ll agree that the system isn’t great. I am a little surprised and greatly disappointed that Labour hasn’t got round to doing something about it and didn’t do something radical while we had a large enough majority to consider doing some of the radical things which need doing. Where I disagree is the implication that what we really need to do is bring back the party which overhauled local government finance twice in four years and still got it so wrong that its own members think its pants and expect them to do better this time?
Maybe that will be their slogan at the next general election – we cocked it up twice already, take a chance on ‘third time lucky’.
The topic gives Henry a chance to trot out his favourite sob-story about West Sussex getting a low grant settlement. I think they issue the same press release every year and just change the date. At the heart of it all is the complaint that when allocating funds the government allocate more money to poorer areas and less money to wealthier areas, which seems to be fairer than doing it the other way round.
Here is the interesting thing though. These press releases never actually say what the grant settlement is. They mention a 2% increase and they talk about a rise of ‘only £1.9 million’. Anyone can do the maths there if they can be bothered and come to the conclusion that if £1.9m is 2% then 100% must be £95m. Add the 2% increase on and you come to a government grant of £96.9m
I wonder why that is? Do they think that large numbers like £96,900,000 would be out of place in complaints about low levels of funding? Apparently they do.
As you would expect me to say – how about a local income tax?
The last time the figures were gone through for Crawley (about 4 years ago) it would mean about 75% of households would pay less, about 10% the same and about 10% (ie. some of the very wealthiest households) would pay about 5% more. The remaining 5% of households would have increased bills of various amounts above 5%.
I’ve never really understood how that is supposed to work, but there are some appealing aspects to the principle – not having a ceiling (I presume) like the current council tax is fairer.
The total disconnect between payment and local services used put people off – unless they see redistribution as a benefit in itself.
Might work better in unitary authorities than in our set-up.
Land tax is another possibility of course, with its potential effect on those who keep buildings empty and the way it can address the inequalities resulting from so much unearned income.
Those figures of yours do, of course, depend on what the rate is set to.
If it isn’t the governments fault who’s is it?
Labour have been in power since 1997 so exactly who’s fault do you think it is?
The fact that the previous shower made a balls up of local finance make it even more appalling that Labour in their 10 years in power have done nothing to improve the situation.