Tuesday, September 30, 2008
Osborne Council Tax shambles
George Osborne's pledge to freeze Council Tax does not of course apply in Wales, though if there is new money involved then there may well be a Barnett consequential available to the Welsh Assembly Government, which it could use, if it wished, to do something similar here, but what exactly does this promise mean anyway?
The BBC tell us that Osborne does not want central government to force the freezing of bills, but any English council which limits spending rises to 2.5% will get that amount from Whitehall. The Shadow Chancellor says that the move will save the average Band D household £210 and he expects all English councils to want to take part at an estimated cost of £500m in the first year and £1 billion in the second.
In many ways this is a quick fix. It is an attempt to calm down protests about an unpopular and regressive tax, which the Conservatives introduced in the first place, without actually changing anything.
Most Councils will feel obliged to take part and in doing so will find their room for manoeuvre severely limited. Essentially they will need to cut back services to meet the 2.5% cap on spending. If they do not do so they will not get the extra money and will face the wrath of Council tax payers who will want to know why their bills are going up when neighbours in adjoining authorities are benefiting from a freeze.
The proposal is also a centralising one, effectively putting more national tax into local government, leaving Councillors with less discretion and local authorities at the mercy of central government for their income.
As a proposal it lacks imagination and offers no relief whatsoever to those on low incomes struggling to pay a Council tax bill out of all proportion to their means. If Osborne had really wanted to make a difference then he could have carried out a proper reform of local taxation, instead he has opted for a cheap headline and an easy gimmick. Is this the sign of things to come?
The BBC tell us that Osborne does not want central government to force the freezing of bills, but any English council which limits spending rises to 2.5% will get that amount from Whitehall. The Shadow Chancellor says that the move will save the average Band D household £210 and he expects all English councils to want to take part at an estimated cost of £500m in the first year and £1 billion in the second.
In many ways this is a quick fix. It is an attempt to calm down protests about an unpopular and regressive tax, which the Conservatives introduced in the first place, without actually changing anything.
Most Councils will feel obliged to take part and in doing so will find their room for manoeuvre severely limited. Essentially they will need to cut back services to meet the 2.5% cap on spending. If they do not do so they will not get the extra money and will face the wrath of Council tax payers who will want to know why their bills are going up when neighbours in adjoining authorities are benefiting from a freeze.
The proposal is also a centralising one, effectively putting more national tax into local government, leaving Councillors with less discretion and local authorities at the mercy of central government for their income.
As a proposal it lacks imagination and offers no relief whatsoever to those on low incomes struggling to pay a Council tax bill out of all proportion to their means. If Osborne had really wanted to make a difference then he could have carried out a proper reform of local taxation, instead he has opted for a cheap headline and an easy gimmick. Is this the sign of things to come?
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I'm surprised that there was not a bigger reaction from the Tories in local government.
Osborne intends to continue whare Thatcher left off. You may remember that it was her government which introduced capping powers, after an election campaign which included the slogan: "Town hall, not Whitehall".
Osborne intends to continue whare Thatcher left off. You may remember that it was her government which introduced capping powers, after an election campaign which included the slogan: "Town hall, not Whitehall".
I wonder what the plans will by for WAG from the Tories; don't really like devolution or devolving powers.
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