The Conservatives have today laid out their new plans for giving people direct democratic control of Council Tax rises. The proposal is that any Council wishing to raise Council Tax by more than a nationally determined threshold would have to hold a referendum to get the electorate’s permission to do so. A system like this would be a great step in the right direction – localising tax control, increasing democratic accountability and bringing a number of other benefits.
Local taxpayers have suffered astronomical rises in Council Tax in recent years, rightly making it one of the most objected-to taxes in the country. The sums involved and the speed of the inflation have made life extremely difficult for many households, and that is reflected in Council Tax’s unpopularity. The thing that makes the recent trend seem especially unjust is that this is not one minority of taxpayers – smokers, motorists, drinkers, airline passengers – objecting that the majority is picking on them, it is a clear majority opinion that the tax is rising too fast and is already too high. Arms-length representative democracy has in this instance failed to respond to the electorate’s concerns.
Part of the problem has been the lack of accountability in the system. When taken to task and seeking to excuse high Council Tax, Westminster blames local councils and local councils blame Westminster. Neither, however, often propose viable solutions and neither should be allowed to escape blame.
In this case, localism has to be the answer.
Instead of the everlasting blame game, or simply allowing councils to force higher taxes on their electorates without adequate explanation or consultation, let’s do what democracy is about: ask the people.
It’s our money, and it is us who will be receiving the services it pays for – on principle, taxpayers deserve the final say on whether Council Tax should rise.
In practice, this is a good idea, too.
For a start, what better way to reinvigorate local democracy?
Few things succeed more in getting even the most apolitical people going than the money in their pocket (or being taken from their pocket). It is no wonder that local election turnout is so low when people know that their vote counts for very little when it comes to one of the taxes that effects them most. Give people a referendum on that tax and I think turnout would be very different indeed. It would be further bolstered by people voting on the basis of the spending proposals that would go with the different suggested Council Tax levels.
There would also be a renewed emphasis on medium and long-term planning in local authorities. If Councils knew their tax proposals would have to be justified and sold to the public not just in broad-brush terms at elections, lumped in with other issues, but in very specific referenda, then there would be an added impetus for clear thinking, accurate costings and good communication. Budgets year-on-year would have to link up. Regular sources of waste would not only stick out like a sore thumb, but would swiftly become deeply unpopular both with those running the councils and other departments who would not want their efficiency undermined by failing colleagues. Councils would have a good, in-your-face, practical reason to stamp out waste and failure.
Interestingly, any Council approaching a referendum would also need to prepare a Plan B, just in case they lost. Writing and costing that Plan B might well be an enlightening experience for some. I suspect there are quite a number of local authorities who genuinely believe they could not provide services more cheaply than they do, but have never actually tried – or been forced by necessity to try – doing so. It has the potential to be a refreshing experience, and one that would be pretty hard to object to. The people’s direct instruction can be quite politically difficult to dodge.
As well as being a good scheme for local democracy and local efficiency, it would be good from a taxcutter’s perspective. We know that people dislike Council Tax, and it would be rare that those who currently preach a high-tax gospel in the name of the people would find themselves backed up by those they claim to speak for.
Opponents of the plans have already started arguing against the idea. First comes the patronising and bizarre claim from the Local Government Association that:
"Local authorities should have the power to determine, without interference, the appropriate levels of council tax for their areas."
Without interference, you’ll note, means without the involvement of those inconvenient little people we know as “the voters”. You know, the ones that whom the elected Councillors who make up the Local Government Association are meant to serve, rather than view as an irritation…
The second line of attack is scaremongering that this will mean the electorate choosing to hand over as little cash as possible.
First, we have to ask the question – “so what if they do?” That is meant to be the way democracy works, by which people decide what they do want done and what they don’t, and what kind of country they live in. If the politicians or the civil servants disagree with the people’s opinion, that’s just tough.
In practice, though, the people can – possibly to the amazement of the nannying political class – make perfectly balanced decisions on their own. A good example is Milton Keynes, where they held a tax referendum a few years ago and rather than choose the rock bottom option or the high tax option they made the Goldilocks choice (neither too hot nor too cold) and picked the one in the middle.
So the plans bring with them several benefits to local democracy and the taxpayer. There is always room for improvement, of course – true localism would want to see powers returned to local or even referendum-based control, and central Government would still guarantee local authorities the right to a minimum tax rise – but it is a good start.