It’s only Tuesday morning but this week we’ve already had both the Lib Dems and the Conservatives proposing referendums (*or referenda), on Europe and Council Tax respectively.
The Lib Dems have been characterised as uncritically pro-Europe, and we’ve not always done much to challenge that. We should.
I believe that countries working together to solve problems like climate change, terrorism, trafficking and pollution makes sense; I believe that the right response to globalisation and the power of multi-nationals is to have strong international institutions, not fragmentation; I believe that the EU has given its members peace and prosperity and I want to be part of that. But I’ve never had the chance to say so.
I have dim memories of the last Euro referendum (I favoured the anti EU vote then solely on the basis that their ads were funnier) but as Vince Cable reminds us, those of us whose working lives are now affected by the EU have never had a vote on it. And we should. Let’s have a vote on the real question – do we think we are better off in the EU or not? And let all the parties be honest on their position.
Of course, the Tories don’t have a united position on Europe. Which may of course may be part of the they rushed out their own refendum idea – on council tax.
As far as the Tories’ proposals for council tax go, to paraphrase Dr Johnson, their proposals are both original and good; but the bits that are good aren’t original, and those that are original aren’t any good.
The idea of having a referendum on the level of council tax increase isn’t new. And like all the best Tory policies these days, it’s nicked from the Lib Dems. Where Lib Dem councils have had council tax referendums, they have shared the honest choice between modest increases plus service cuts with larger increases to raise investment in local services.
The difference in the Tory plans is firstly that the decision to hold a referendum – the ‘trigger’ point – will be set by the man in Whitehall. This means that a local election could be fought and won on the premise that an increase in spending in local services was needed, only for the Whitehall dictat to force a referendum on that same issue.
Secondly their referendum would not affect the council tax level which had triggered the referendum – but would force a rebate in the following year’s tax. That makes a nonsense of budget planning – councils would be tied into a council tax cut even before they know the level of Government grants, the demand for services or the local mood. One year the council puts up council tax to build a new old people’s home or swimming pool; the next it has to raise charges or reduce access to the same facility because of the forced rebate. It’s a recipe for increasing the kind of binge-budgeting – up the year after elections, down the year before them – which already gives council services roller-coaster financing.
What the Tories are failing to do is address the inherent unfairness of council tax. It’s not related to ability to pay, but on the (notional) value of your home. So you may face a bill you can’t afford calculated on the basis of an asset you cannot liquidate and may not even own. Unlike inheritance tax, council tax is a property tax that everyone pays, every year. And because it only raises at most a quarter of local council expenditure, you have to cut £4 from budgets for every £1 cut in council tax.
Abolishing council tax, replacing it with a system based on ability to pay and raised via the existing income tax system would be fairer, simpler – and save a fortune on council tax collection, benefits – and rebates. Only the Lib Dems are promising to axe council tax.
Don’t get me wrong. I’m not opposed to referendums or to rebates. Here in Islington, the Lib Dem council has given us both this year. I got a £20 rebate on my council tax because I pay by direct debit, saving the council time and costs (I took the option to give the £20 to Islington’s Climate Change fund, so no extra drinks, sorry). The Lib Dems have consistenly kept their pledge to keep council tax below the London average, so no need for a referendum on that. But we did get a referendum vote on whether the Council should switch the cost of residents’ onstreet parking permit from a £95 to a banded scheme based on CO2 emissions.
All the parties on the Council (Lib Dem, Labour, and the lone Green) supported the permit change. But only the Lib Dems supported a referendum. Why? Having been elected on a pledge not to raise parking charges, the Lib Dems felt it was right to have a vote before breaking that pledge. Meanwhile our Labour MP showed her contempt for democracy by ripping up her ballot paper, and urging others to do the same; a misjudgement. Lib Dem trust in the people paid off; a majority in every ward for putting green taxes into action.
That’s the right way to do referendums. A clear question on a basis of clear principle. No wonder Labour won’t support them.