can’t, won’t but probably will, pay

Some months ago, BBC Radio 4 broadcast an episode of The Reunion which brought together people associated with the Community Charge, aka Poll Tax, aka Thatcher’s Final Legacy Project. Guests included Geoffrey (now Lord) Howe, who proclaimed his continuing belief that by the end of the affair the system was fairer and more popular than at its launch, a former council worker who recalled receiving payment cheques scrawled on the back of used underwear, and an anti-Poll Tax campaigner who confirmed she was still paying back monthly sums to a Council which didn’t exist at the time over twenty years since the scheme ended.

Of all the problems with the Poll Tax, the most galling was its ‘one price suits all’ core, which meant a struggling family bringing home all they could to fill a cupboard paid the exact same sum as the husband and wife barrister superteam two streets away with more money than they could stuff in every cupboard in their house and its comfortable extension. By having little regard to ‘ability to pay’, the Poll Tax soon struck an iron-tipped arrow through the heart of families, their communities, and to an extent entire towns. And as ever with the dying days of Thatcher’s time of office, those towns were invariably Northern English.

Council Tax replaced the Community Charge in 1993, with each repayment band based on the 1991 valuation of properties (very Conservative). These bands have not been touched in England since, so where you live today continues to be based on the early-90s housing prices. As many people moving into new build housing estates have discovered, a very well priced house in rabbit warren suburbia can be ‘bracketed’ with not so nice properties over the road, producing an unintended saving of hundreds of pounds every month. Similarly local authorities that require of developers affordable housing can inadvertently include these properties in higher than intended bands. Unfair and uneven problems at both extremes.

For the record, Band D in England is for properties valued at up to £88,000 in 1991. What chance this price today? In Scotland, Band D is for properties up to £58,000. Meanwhile in Wales, where a revaluation eventually happened (of sorts), there is something nearing a “mansion tax” in the newly introduced Band I for properties over £424,001 [that quid is important, and clearly mansions are much cheaper in Wales].

At the rotten core of Council Tax – as with the Poll Tax – is the ‘ability to pay’ argument. Wealth does not equal income. A very well to do leafy home does not mean its occupier has a well to do salary to match. The inequality at the heart of the Poll Tax has festered for 20-odd years, families unable to keep up with payments as their salaries stall and local authorities feel pressure to continually plug their financial gaps with further and further, higher and higher council tax bills. As the push-me/pull-me battle goes on between central Government and local councils over what exactly one can do for the other, and at what cost, the ‘consumer’ pouring over bills at the action end is left with an increasingly unfair, unjust, uneven funding scheme. Banding by each local authority can be at the whim of whoever is in charge – almost always  the Conservatives, or Labour, or the Liberal Democrats, or a combination thereof. Invariably whoever is in charge at the time may find it necessary to raise council taxes as the most ‘palatable’ electorally. There is almost no link between the ‘central pot’ of local government funding and the local associations spending them. In 2003, Devon County Council increased its element  of the overall bill by 18%.

So why does Council Tax still exist? It is an unfair, unjust tax, punishing people on the whims of the housing valuations, the bands, and the political parties in Town Halls. The current push from Eric Pickles to persuade local councils to freeze Council Tax has left some local authorities unable to move in fear of being labelled as the council which dared to increase the costs to families and older people in times of economic hardship.

The most popular alternatives are some form of local income tax or local land tax. Both would be a jolt to the current ‘affordability’ argument initially representing a change in attitude towards a more locally relevant scheme. Local authorities could be given greater autonomy to react to changes in average wages or work with regional partners to provide a local(ist/ism) VAT claim-back scheme. Local authority funding has always been a complex multifaceted machine, money pouring into and out of local government at a pace of knots, leaving some councils with barely enough time to notice how little overall spend they have for the year ahead. There’s no good in central or local government being lumbered with a scheme which actively encourages councils to struggle in the short-term with no chance to plan genuinely long-term programmes of investment or employment (and most leisure activities can go to Hell in a provincial theatre.) The Tories love localism – it says here – so let us see some respect to the Councils. Give them the right to set their own local income or local land taxes, rejig the business rate rules, look for genuinely local solutions for a genuinely local(ist) problem.

Extending out of the authority funding arguments are the issues of two-tier government in some parts of the country and whether we need it (short answer; no: long answer; nnnnnnnnnnnnnnnnoooooooooooooooo), and whether existing local authority boundaries reflect accurately the live/work/play realities of a population much expanded and redistributed from that which existed when the lines were last redrawn in the 1970s. Another reason for the UK to consider a great big fat constitutional and administrative reset button, reshaping the map to provide  more responsive and autonomous local government across the whole country. The experiment with Council Tax must now be dragging itself to the very end, with enough evidence to show it’s become as unrepresentative as Poll Tax was at its launch. Any tinkering with the scheme has been put off each time due to the party political implications, and with its 20th anniversary next year, I’d suggest Eric takes some time out from bullying some authorities into submission and starts facing the considerably loud music.

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