Thursday, 14 February 2013

Municipal Mansions

It is an appalling proposal to tax people on what, unless it happens to be for sale, is the purely notional value of an asset which they might not necessarily own anyway, and which in any case they could not possibly sell unless they were expected to go and live up a tree or something. But we sold the pass on this one more than 20 years ago, when we effectively restored the hated rates, and with them all their impeccably middle and upper-middle-class exemptions for students, clergy, second homes, and so on. Paid for by a hike in VAT, hardly the obvious way to help the poor.

We need a fair, efficient, comprehensible and accountable system of funding. That needs to be an annual flat fee, fixed by the council in question, strictly voluntary, entitling the payer to vote and stand in elections to the council, and payable through the benefits system on behalf of the very poor. Central government would continue to meet much or all of the cost of statutory services to statutory standards. With its fees, the council could do pretty much whatever it liked on top, directly accountable to the people paying the bills.

Everyone uses lots of local services. Unless they send their children to commercial schools, as hardly anyone does, then most people make as much such use as each other, regardless of class or income; indeed, such things as street lighting are often significantly better in more affluent areas. Yet hardly anyone votes in local elections, because local government is emasculated yet expensive, and notoriously unaccountable. It has not always been any of those things.

There must also be a tax on the productive value of land per acre, other than that occupied by the homes of the less well off, perhaps making possible the abolition of stamp duty, and in any event establishing and enforcing the principle that no one should own land other than in order to make use of it; this was proposed by Andy Burnham when he was a candidate for Leader of the Labour Party. There must also be a statutory requirement of planning permission for change of use if it is proposed to turn a primary dwelling into a secondary dwelling, a working family home into a weekend or holiday home.

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