Monday, February 19, 2007

Opportunism and Hypocrisy

My wife has been complaining that my blog is becoming too political. She says that I should try to write something funny. So thanks are due to Peter Black. In a post onto his widely read blog earlier today he, (a Liberal Democrat) accused us, the Welsh Conservatives of 'opportunism and hypocrisy'. Political jokes don't come much funnier than that! Its a bit like Tony Blair accusing anyone of 'spin'.

The issue which instigated Peter was Council Tax, a form of taxation which, in principle, I've always supported. In fact, I welcomed it when it was brought in to replace the Community Charge (Poll Tax) - in 1993 (I think). And its slightly more progressive than the old Rates system. But, since it is essentially a regressive form of taxation, it can only work at an 'affordable' level. This is an imprecise figure but it was around £350 on average when it came in - and is now over £1000 on average and will go up by another 4%-5% this year. This scale of increase makes it unaffordable for many people. Labour has discredited the system by driving it up an out of reach.

The second cause of rumpus over Council Tax has been the recent revaluation exercise. I was Conservative Party Spokesman on Local Government when revaluation was approved. I did not oppose it - and I don't think Mike German did either. (Mike was Lib Dem Spokesman on Local Government at the time.) I am on record as saying that for a property tax to be effective, there needs to be regular revaluation. Inevitably there would have been winners and losers - but in about equal measure. In fact, over 30% went up and about 8% came down. The problem arose because the total sum raised by Council Tax was increased by almost 10% under the cover of revaluation - after the Assembly Government had given us an absolute assurance that this would not happen. Again Labour totally undermined the Council Tax system.

The Lib Dems and Plaid Cymru want to scrap Council Tax and replace it by putting another 3%-4% on Income Tax instead. Interestingly Sue Essex was in favour of this until she became Finance Minister and properly understood its drawbacks. 'Axe the Tax' is a great 'slogan' - but for political parties that never expect to be in a position to put it into effect. In fact its as blatant an example of 'opportunism' as you will ever see.


Anonymous said...

You are wrong to argue that Labour has discredited the council tax system. The system created by your party was bound to fail because it was introduced in a panic and wasn't properly thought through. In simple terms the Audit Commission showed in its report after council tax in England went up by 12% that the level of the tax in each authority is linked directly to the amount of money given to each council by central government. The so called gearing effect has also meant that any council that spends above SSA faces huge increases in council tax. In Wales the situation is made worse by the botched local government reorganisation carried out by your party. Some of us remember William Hague's look of panic when he realised the size of the council tax increases after 1996. He was forced to introduce the dampening mechanism to reduce its effect. The basic problem is that local government raises too little of its money locally. With Sue Essex threatening to introduce capping at 5% local government has virtually ceased to exist in Wales. Local authorites are facing really difficult decisions in this year's budget but next year will be even worse for most of them as they are hit by equal pay.

Glyn Davies AM said...

The system hasn't failed. It has been abused by being raised to too high a level.
Most of your comment simply reinforces the point that Labour Governments have forced Councils to push up Council Tax by making underfunded demands of Councils.
I really cannot see what local Government re-organisation has got to do with it - and anyway I would be interested to know how you think it was 'botched'. It seemed very sensible to me, apart from the creation of the hopelessly unwieldy Powys.
A 'damping' mechanism is always sensible when there is big movement for any reason. We have a very sensible 'damping' scheme at the moment. (or has it just ended?)
I agree with your point about Council's raising a bigger proportion of their own finance - but cannot see any way forward on this except direct through funding some major services by the Assembly Government itself - but we will have to wait for the Lyons Report to take this debate forward.