Monday, March 19, 2007

Toothless Lyons

It was about eleven o'clock in the morning, mid October, with the sun not shining and a look of hard wet rain in the clearness of the foothills. I was wearing my powder-blue suit, with dark blue shirt, tie, and display handkerchief, black brogues, black wool socks with dark blue clocks on them. I was neat, clean, shaved, and sober, and I didn't care who knew it. I was everything the well-dressed private detective ought to be. I was calling on four million dollars.

I collect bank statements. In fact I have a complete set of the Tyler statements going back to 1793. They take up much less space than you might imagine, and always make fascinating reading (Sorry, what do you mean? You spend your time going out and meeting people?)

For example, we've just received a bill for £2,743.02p. And my statements give me a fix on it straightaway.

The bill's from those nice people at the council, justified by the claim that "your pound transforms lives". Well, Council Tax certainly does that- next year it will transform ours to the tune of £2,743.02p.

But by turning up my bank statements I can get a much more useful perspective. Looking back to 1996-97, I see our bill on this same house was a mere £1,380. That means it's literally doubled under NuLabour. Whereas prices generally have gone up by... er... umm... can this be right... just 17% (yes, that is right- on the government's preferred CPI measure, prices really are up by only 17%- see here).

Now 80% is onehelluva difference, and you bet I'm complaining. But I'm also fully aware that we're the lucky ones. We can afford to pay. Some groups- especially cash poor, house rich pensioners- find it much more difficult. Indeed, we're heading once again into the jail season for 82 year old refusnik grannies (see The Unrepentant Council Tax Vicar for the prison blog of the Rev Alfred Ridley and his wife Una).

Unsurprising that polls consistently show Council Tax to be the most unpopular tax in Britain. Despite some pretty stiff competition.

The fact is that local government finance is a total mess. And the strain shows up in that highly visible annual Council Tax demand.

Council Tax may only account for 25% of local authority revenue, but it's the balancing residual- the difference between two much larger numbers. Council Tax is what has to bridge the financing gap between all those spending programmes laid down by Whitehall, and the miserly Revenue Support Grant paid by central government to fund them.

Hence the Lyons Inquiry, due to report alongside Wednesday's Budget. When it was set up by Gordo in 2004, the idea was that Sir Michael Lyons would go away, consult widely, and come up with the radical overhaul the system undoubtedly needs.

Well, no. The idea was that ex-local authority bureaucrat Sir Michael Lyons (pic above) would take the whole thorny issue off into the very longest stinging nettles, and not come back until Gordo was safely ensconced in No 10.

Because from the perspective of national politics, reforming LA finance is a real stinker.

To start off with, Westminster politicians like the current system. They like having control over the tax and spend decisions of LAs, without being directly in the firing line when things go wrong. Much much better to blame local politicos. It's called power without reponsibility.

Then there's the issue of winners and losers. Winners are easy, but any real world reform will also produce losers. And as the LibDems found to their cost with their local income tax proposals for Home Counties marginals in 2005, the losers tend not to vote for you.

And then there's the whole mind-crushing prospect of dismantling the current delicately spun web of financial allocation rules and replacing it with something nobody has really bottomed. Would those key Labour authorities still get the same generous helpings?

You appreciate the problem.

So instead, if reports are to be believed, Sir Michael will report back with nothing. Apart that is, from several hundred pages of guff, and a recommendation to add two ot three new top Council Tax bands. There will be a distinct absence of teeth.

Which will doubtless increase the bills Chez Tyler by some further multiple.
But more importantly, it will miss yet another opportunity to introduce the one reform local authorities so deperately need- fiscal decentralisation, starting with restoration of the business rate to local authority control.

PS Never trust a man in a powder-blue suit. Unless he's Philip Marlowe.

No comments:

Post a Comment