We need a Local Tax based on Ability to Pay
December 18, 2003 12:00 AM
By Andrew Stunell MP in Stockpot Times
By Andrew Stunell MP in Stockpot Times
Stockport has waged a long battle to get a bigger slice of the cake when central government grants are handed out. This time last year, as part of the 'f40' group of local authorities, the town gained a score draw when the Whitehall formula was rejigged. The huge gap between the amount of money given to educate each child in Stockport compared to other areas with the same problems did actually get less. That was the good news. The bad news was that we were still left at number 142 out of 146 in the list. Our money didn't go up much - it was just that some of the better-treated councils in the south took quite a hammering.
That hammering forced Council Tax rises of up to 16% and more down south, because their only alternative would have been to sack hundreds of teachers. Suddenly residents in the south of England found themselves facing exactly the same squeeze that those of us in the North have had for years - for without enough grant money to provide a good schools service, the only way to keep up standards is by raising more money from the Council Tax. And those rises really hurt, especially for those just above the level where benefits are available.
So when those same councils made it clear that the grants for next year would mean yet another huge rise for their Council Tax payers, all hell broke lose. In Devon they even had to call the police out to control protesting pensioners! The row down south has underlined the fact that the Council Tax system is deeply unfair, and not suitable for raising the big sums of money needed to provide top class services such as schools, police, and fire brigade.
That is why we need to scrap Council Tax and pay for local council services with a fair tax, based on the ability to pay. Most people recognise that Income Tax is fair. To replace Council Tax with a Local Income Tax would put around 3.7pence in the £ on the PAYE bill. Over 70% of pensioners would be better off under this system. At present they are often the hardest hit by big rises, with fixed pensions threatened both by failing pension schemes and very low interest rates.
Just for once the risk of massive Council Tax rises falls mostly on people elsewhere in the country. We should be grateful that their misfortune means there are yet more recruits to the campaign to scrap Council Tax, and replace it with Local Income Tax. I will be making that case time and again in Westminster.
And no-one should be surprised that the Conservatives are against it. They don't want fairer taxes, and they don't want higher taxes for the rich. At least when their leader was asked a little while ago what he would do about Council Tax he was honest enough to say 'I don't know'. That's the Official Opposition, by the way. You'd have to laugh if you didn't cry.
End
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