From the FT:
One of the government’s main tax-cutting drives has been to encourage councils to keep tax rises to a minimum. Ministers have done this in two ways: firstly, by giving councils a cash incentive to freeze council tax; and secondly, by forcing any council that wants to raise tax by 2 per cent or more to put it to a local referendum.
Of course, any self-respecting council is going to set a rate that’s just below the threshold. Eric Pickles was not chuffed and wanted to lower that threshold to 1.5%.
He did not get his way, thanks to the Liberal Democrats in government:
This suggestion, however, has triggered a backlash from others in government – mainly the Lib Dems, who have long been champions of localism. The FT has today learned that in the last few days, senior Lib Dems, including Nick Clegg, have told the Tories they simply won’t allow the 1.5 per cent cap to come into law. And if the Lib Dems veto it, it cannot become coalition legislation.
Tim Farron, the Lib Dem president, told us:
Eric Pickles should spend less time issuing Whitehall diktats and more time talking to the dozens of Conservative-controlled councils who are proposing council tax rises this year. It seems like the Liberal Democrats are the only true party of localism in the coalition.
Lib Dem activists, many of whom work in local government, will be delighted. This is a classic case of the party being willing to differentiate itself from its coalition partners on an issue that matters deeply to its core vote.
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28 Comments
So the ‘differentiation’ in this case is that the Tories want to limit council tax rises to 1.5% and the Lib Dems want to limit them to 2%? Wow.
I am sorry, but this action is far too late – we should have vetoed cuts, and the rsulting mayhem that is continuing and will get worse in local government. It was long ago evident that Tories’ view of localism was very different from Lib Dems’ “traditional” view, ie services etc through an empowered local govt. Pickles’s view is very much the Thatcherite line he has always espoused. Again our parliamentarians have let the party (and the people) down badly.
What is it with LibDems in their inability to connect the dots, and consequences of ill thought through policy?
http://www.telegraph.co.uk/news/politics/liberaldemocrats/10618236/Bigger-council-tax-raises-forced-by-Liberal-Democrats.html
The nuances and fine detail of this decision, is totally lost on a public who see only a Liberal Democrat party, intending to increase local taxes and reach deeper into their pockets, whether they can afford it or not.
@ Tim13
“I am sorry, but this action is far too late – we should have vetoed cuts”
What would you have cut instead of local government then? Or how would you have forced the Tories to increase taxes further, given our small number of MPs? Or perhaps you’d like an even bigger deficit.
The bribe to councils to freeze council tax is paid for by the Government borrowing money. What would l have cut instead – well firstly, the pathetic pet projects like free school meals and married couples allowance. If we can’t fund the old we can’t afford new ‘freebies’. Secondly, I’d cut the housing benefit bill by reintroducing rent controls, starting with a year long freeze and capping the amount buy to let landlords can claim from the tax payer, I would fund a massive expansion of council house building and buy houses on the open market and convert them to council house rents.
I would cut all the pensioner freebies which rob peter to pay peter.
I would remove all the capping on councils – if local councillors feel they need a 10% increase in council tax – then they should have the power to introduce it. If voters don’t like it, vote them out at the next election.
Let us be clear, the pledge from the Tories was referendums on council tax rises would be triggered by local people if they felt it was excessively high. What the Tories have done with lib dem acquiescence is to allow two people, Eric Pickles and George Osborne to impose referendum of every council whatever the circumstances with the cost falling on the council for the referendum and for rebilling if any increase is rejected – it is a three card trick with only one card councils can choose.
RC I take a hardline view of the situation. I have always considered the cuts as ideologically motivated. I believed that Tory free marketeers and orange bookers were very “lucky”, in that a crisis in the Greek situation arose just at the time they were “coalitioning”. This enabled them to use that as a reason for hardline cuts. When a more measured assessment of the situation had been made, I would have suggested income tax rises to cover, with a steeper curve towards the higher end. I believe my approach would have required more workers in the public services, certainly in the short to medium term. I spoke to one of our junior ministers a few months in, and he admitted that we could have gone for a different tax/spending balance, but decided against. That is one reason why I think the line “we have moderated” Tory approach is disingenuous. I am well aware that we cannot have a limitless provision of public services, but history shows we can do much more than we currently are. Note also that the tax rise used was in the essentially regressive VAT, not in income / wealth / land tax etc which could have been progressive.
RC
Perhaps instead of having cuts we could have forced multi-nationals to pay the taxes they should (and taken away the loop holes which allowed them). Perhaps we should have followed Cables initial policy of cuts and not Osbornes.
@ Tim13
“RC I take a hardline view of the situation. I have always considered the cuts as ideologically motivated.”
So having a deficit of 11.4% of GDP in 2010 was OK was it? We just carry on piling up debt like there’s no tomorrow and no plan to reduce the deficit at all?
I find it unbelievable and totally irresponsible the extent to which people will indulge themselves on this matter.
“I believed that Tory free marketeers and orange bookers were very “lucky”, in that a crisis in the Greek situation arose just at the time they were “coalitioning”. This enabled them to use that as a reason for hardline cuts.”
So presumably Alistair Darling and large parts of the Labour front bench at the time were also in on this conspiracy at the time?
@ Caracatus
“What would l have cut instead – well firstly, the pathetic pet projects like free school meals and married couples allowance. ”
Well good luck to you on telling the Tories, with six times as many MPs as us, that we want all our policies to go through but absolutely none of theirs.
That’s really going to work, isn’t it?
RC Didn’t say “conspiracy”, but yes, of course. nuLabour set its course over the period 1994 – 7. Our party followed over the period approx 2003 – 10.
@ Tim13
You still haven’t answered my question about how it would have been possible to face the international financial markets with an 11.4% of GDP deficit while defiantly sitting there and saying no, we’re not going to do anything to reduce it, but you can still carry on lending us money anyway.
They would have stopped lending to us in an instant.
In answer to the question —“What would you have cut instead of local government then? ” from RC 5th Feb ’14 – 1:33pm
Here is my list of cuts (or the beginning of my list) to be made before cuts to local government. —
Trident, aircraft carriers, excess MoD land holdings (MoD is one of the top ten landowners in the UK)’ all the Royal spongers, the Church of England (why do the majority who have nothing to do with the CofE subsidise Bishops to live in palaces?), the ridiculous Police Commissioners and their elections that noody cared about, funding for the Royal Opera House, subsidies for Franco-Chinese nuclear power stations, shooting badgers, etc, etc, etc,
I expect councillors round the country who see the reality of what Cameron-Clegg-Pickles have done to local democracy could add to this list.
Sorry, you ought to have vetoed the whole lot anyway.
Add localism to civil liberties, and all the rest that you junked.
Well we are in the deep and sticky with our Council revenue budget being more or less halved over 5-6 years and we still can’t persuade the Tories the put up the Council tax by even 2%.
The deal last year was – Tories agree to change the Management Team (top Council staff) budget by adding in everything we wanted not to cut, and we agree to zero increase in Council tax. Not very logical really. Might be the same again this year.
(If you wonder if there is an alternative, come and meet our Labour Party).
Tony
Tony Greaves 5th Feb ’14 – 5:09pm
If you wonder if there is an alternative, come and meet our Labour Party
Unfortunately the actions of the coalition are breathing life into the Labour Party even in those parts of the country where we had all but got rid of them.
For example see the Mike Smithson report on latest You Gov polling of teachers. What is true for teachers is probably true for other public sector workers. Extract from Mike Smithson blog —
In MARCH 2010 YouGov found teachers splitting CON 33: LAB 32: LD 27: UKIP 3. In the latest polling of the same segment published last month it is CON 16: LAB 57: LD 8: UKIP 8 which is quite some movement.
Clearly a large amount of teacher support for both coalition partners has switched to LAB.
It is reckoned that there are between 900-1,000 teachers in each constituency. On top of there are others who are part of what Mr. Gove describes as “The Blob”. In addition there are retirees as well as friends and families of teachers. All this adds up in the marginals to a significant voting group.
“They would have stopped lending to us in an instant.”
Like hell they would.
the UK has its own currency – unlike Greece – and therefore plenty of latitude to follow its own economic policies and, if necessary, print money. And before you get bumptious about that, think about what QE is, and just how much Osborne and co. have relied on it – whilst racking up more borrowing in 3-4 years than Labour did in 13.
The UK’s borrowing schedule isn’t measured in months and years, like Greece’s is, but in years and decades, so it’s not unwise to borrow knowing that the repayment on that debt is probably a good 10,15,20 years away, by which time (assuming you don’t try the Coalition method and strangle through through austerity) you’ve probably grown your economy enough to cover the repayments without problems.
Interest rates remain historically low – even the government’s inept loss of the AAA status didn’t spook the markets, and it’s notable that UK gilts and so forth remain a very good, stable, reliable bet in the money markets, particularly when the alternatives are riskier or performing as badly they are.
Looks like you bought into the Coalition’s nonsense lock, stock and barrel.
“On top of there are others who are part of what Mr. Gove describes as “The Blob”. In addition there are retirees as well as friends and families of teachers.”
I can tell you that as a deeply committed teacher for 30+ years, now retired, my father is cheering Gove on.
I doubt he is the only one.
jedibeeftrix
So your father is one of the 16% who will vote Conservative. I am not sure there are any wider lessons to be learned from that other than he may have lost a lot of his friends from four years ago.
One might have hoped the fact that this government has given massive income tax cuts to people on above-average incomes would at least have given the ‘there is no money’ brigade pause for thought. But apparently not.
RC I don’t really think I need answer you – plenty of others have answered with info for you to chew over. There are a number of points in answer to yours, but the stark truth is that the country and the media were presented with a panicked reaction (on the part of the Lib Dems, in any case), when there was no need to panic. A question for you, RC. Why did the financial markets not go into overdrive much earlier? They had had 2-3 years to react in the way you say they would have. And why are you disregarding greater use of progressive tax-raising if there were a need to raise extra money?
“So your father is one of the 16% who will vote Conservative. I am not sure there are any wider lessons to be learned from that other than he may have lost a lot of his friends from four years ago.”
16%… of teachers who vote tory?
i think a lesson he learned a long time ago was that the blob has very little consideration for ‘unorthodox’ viewpoints! 😉
@RC
Not still at it with that tripe?
Look at the total debt, and when it was due.
We had extremely long scheduled debt.
http://www.bbc.co.uk/news/business-15717770
“It’s the number “13.99” which tells you the UK isn’t bust and probably won’t go bust. That’s the average maturity of British government debt, the number of years that we as taxpayers have to pay off what we owe our creditors.
Those 13.99 years should surely be long enough to reconstruct our economy to generate growth in a balanced and sustainable way, to prove that we can pay our way in the world.”
You just fancied a go in government.
This is not a cut just a cap on the increase, it should really be lowered someone needs to realise that the more it goes up the less can pay
@ Chris Manners
It’s not “old tripe”. If you say you just can’t be bothered to cut your deficit, the markets’ attitude to you will change overnight.
As for “just fancying a go in government” what kind of an accusation is that supposed to be?
I suppose Labour went into office in 2005 with just 36% of the vote “just because it fancied it” did it?
@ Tim 13
“I don’t really think I need answer you – plenty of others have answered with info for you to chew over. ”
I’ve chewed it over and all the arguments presented are laughable. You haven’t answered a single thing.
This idea that having our own currency absolves us from acting in a responsible fashion with our public finances is totally wrong-headed and ridiculous wishful thinking. Having a long debt schedule means nothing when you can’t borrow any more at reasonable rates because no-one expects you to bother to reduce your overspending.
You are simply grasping at straws here in a vain attempt to justify your total lack of responsibility.
I know that for many,memory can be a fleeting sensation,particularly in local politics, but it should not be forgotten that for those of us who are somewhat grey haired and long in the tooth, the Lib Dems lost all long term credibility at a local level by their inability to control local taxation when they were in a controlling position on many councils. Looking back through those rose tinted spectacles to the the days when the party dominated the councils of East and West Sussex, I can only really remember the pain of ever increasing and ever more unaffordable council tax bills that resulted from the freebooting policies of all council administrations, and by Lib Dem controlled councils in particular.
“You are simply grasping at straws here in a vain attempt to justify your total lack of responsibility”
I’m not convinced that personal insult really adds much to the debate.
Andrew:
No doubt you’re right about East and West Sussex. There are other places. Many Liberal or Liberal Democrat councils have kept tax levels down and effectively pursued efficiency savings. Many groups holding balance of power, as we did in Waltham Forest in 1982-6, used their power to preserve services while keeping control of the budget. On Labour regaining control in Waltham Forest, there was a 62% rate rise followed by capping and cuts. Of course, where councils have been Tory-controlled for ages, there may be a pressing need to spend a bit more.
I agree that local government has had a bad deal since 2010 even in an environment of cuts. The squeeze had already been on. Yes, some voters, John Dunn, will dislike our stand now, but if we’re just in politics to do what’s popular, why bother at all? At the core of Liberalism is belief in pushing power to the lowest levels possible. In many cases that’s local government. And why now the central government has been convinced of a need to spend on infrastructure, is it not going to local councils and saying, “OK, what infrastructure does your area need most?”
ite the Ballot yesterday registered tens of thousands of new young voters. Great achievement. At the same time Prime Minister’s Questions in the House of Commons with its atmosphere of shout and abuse must have discouraged tens of thousands of people of all ages from any desire to be part of the democratic process. People’s confidence in their elected representatives must be at a very dangerous zero. When people have no confidence in the current regime we must be very anxious about what might be seen as the alternative.