Sunday, 7 September 2008

Will Cameron shy at the sight of flame?

Michael Portillo comments in the Times this morning on the dangers of reforming local taxation; Thatcher's downfall, he reminds us, was down to something that started in Scotland as an experiment to reform local taxation. The 'incendiary potential' of changing local taxes may well be something that Cameron will shy from, particularly if Scotland is to be once again the test-bed of a scheme that could be extended to England. Yet unless Cameron is prepared to tackle this issue, his entire Premiership, the record of his government, risks becoming as vacillating, pointless and ineffective as Brown's has been. Without reform of local taxation, all Cameron's brave words in support of localism, of shrinking the Leviathan state, of empowering the little platoons are no more than specious rhetoric.

Salmond is no localist. He is a ruthless central Statist every bit as addicted to micro-management as Brown. As Simon Jenkins wrote in the Guardian on Friday:

The property tax fixed by individual councils will be abolished and all sub-national accountability with it. Scotland's 32 area authorities will be allotted their total revenue by Edinburgh, a degree of fiscal centralism unknown in any other country in Europe. It is ironic beyond belief that the first part of Great Britain to enjoy serious democratic devolution should use it to kill off democratic devolution within its borders.

Salmond is about to achieve what Nigel Lawson, Kenneth Clarke and Gordon Brown failed to do: kill off a chunk of British local government and render local authorities mere delegates of central power. He wishes to concentrate control in his office and ensure that Scotland's counties, boroughs and communities have no say over their services or spending priorities.
The alternative would be a radical reform of the Scots system with Scots taxes split two ways; a 'national' tax on income and consumption paid to the UK government which would be passed on, less Scotland's share of UK-wide costs such as defence, to the Scottish Parliament, and a local tax with an income as well as property base that would go directly to each of Scotland's 32 local authorities, with greater freedoms and greater responsibilities. This alternative would deliver real power to Scotland's counties, boroughs and communities.

Portillo is also convinced of the need for a local income tax component:
I am convinced that an income tax supplement must be part of any equitable local tax system. I admit that earners would pay more and high earners much more, but greater social justice is not a powerful argument against it.

More importantly, raising the money in that way would enable local government to grow in scope and importance. By comparison with almost every country I know, we suffer from chronically weak local government and from central government that is too powerful. Decisions are made remotely, national policies are imposed although they are inappropriate in most localities and terrible amounts of public money get wasted.

So here then is a clear choice, but not one that could or should be decided by Scots voters alone. And this is Cameron's conundrum. A UK manifesto commitment to reform of local taxation would bring the ghouls and banshees of the Poll Tax howling around his head during an election campaign. A manifesto commitment to implementing it in Scotland only would play into Salmond's hands. Brown, too, has been caught on Salmond's hook, with no room to wriggle. But to let Salmond implement in Scotland something that is the very antithesis of Cameronian aspirations, destructive of the Union, that will leave Scots more alienated and isolated from control over their own lives and communities than ever, slaves to SNP Welfarism and to Salmond's distorted national vision, would be a gross betrayal of our national interest and a gross betrayal of every man, woman and child in Scotland.


Newmania said...

Local income tax you think. The problem is that you cannot take the marginal disincentive in isolation or the marginal unfairness.

Credit welfare housing and so on mean the steep curve from £25,000 to £50,000 , where all the money is is toppling over. As is so often the case you cannot have any sort of discussion about it until the general level is reduced and tranparent again.

UK Voter said...

Since Michael Portillo left politics and enetered TV, albeit not voluntarily, I have warmed to him as he became less stuffy and more human.

However, I do not agree with local taxation, for two reasons. There are more, but these are my principal objections.

Firstly, the redistribution of wealth is well underway and I believe there is a limit to just how much middle income earners should have to subsidise those less well off. If they were all genuinely needy, then fine, but many will not work, rather than can't work and this would have to be dealt with first, otherwise people just get alienated by the whole progamme.

Secondly, local authorities are for the most part, made up of councillors who have too much time of their hands. Many have insufficient experience to be making the big decisions on where our money should be invested. Yes they have CEO's, but the councillors captain the ship.

If I am going to have to pay a local tax, I want to be certain that the people that are spending that money do so wisely. Not on projects that will ensure that the councillors get elected again by targeting their core voters, but on programmes and services that benefit everyone. Also, whenever you add another layer for income tax, it always gets abused one the dust has settled, so everyone would be paying more.