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Abolish Council Tax Capping

Comment 17th July 2010

Repeal central government's power arbitrarily to limit the power of local councils to raise money to fund the local services people want.

It would need to be done in the context of a thorough look at the operation of the present Council Tax arrangements, which are opaque to the ordinary citizen, unfair in many respects, and increasingly out of kilter with the economics of a rational tax base.  This tax base could, with advantage, be broadened.

Difficult stuff, but a re-casting of the system could improve the standard of locally-provided services and re-invigorate our democracy at both local and national levels.

Why does this matter?

The underlying principle of all democratic government is responsibility to the electorate.  Historically, our faltering progress towards democracy in Britain has been driven mainly by successive attempts to hold the state to account for its raising and spending of  taxes – Hampden's Ship Money case is probably the best-known episode.

This principle of accountability is as true for local as it is for central government .  Yet the very purpose of council tax capping is to interrupt that essential trail of accountability at the level where it could be at its strongest and most direct – in local government.  Politicians rightly bemoan the low level of  turnout at local elections, and the poor quality of some local councillors, but the electorate are not stupid.  We can see when something is important, and we know that powers and responsibilities have been rapidly stripped away from local councils over the past four decades at least.  So, many of us don't bother about local government.  One of the consequences of this is that MPs have become increasingly in "constituency work", and many of them work very hard dealing with isues which are essentially local.  This leaves them little time to perform their real job, which is to hold the national Executive to account.  So democracy suffers at both levels, national as well as local.

If councils were to be clearly and directly responsible for the financial consequences of their own actions, and if local electorates were brought to see that the remedy is in their own hands at the ballot box, we might have some chance of getting better people doing better jobs in both the House of Commons and in the council chamber.

Repealing central government's power arbitrarily to "cap" councils' power to raise money to fund local services appropriate to local needs is an essential first step to the repair of our democracy.

A scarcely less urgent step is to reduce the proportion of local spending which is funded by central government hand-outs.  It would also open up interesting territory for swaps between locally determined taxes and national imposts like Income Tax and VAT.  Other European countries display ainteresting variety of ways in which this can -quite workably – be done.

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