The government feels it has to tread carefully around income tax. But if the aim of the Labour movement is to narrow the gap between rich and poor, then a mature assessment of the way to finance this is vital.
One thing the government is currently reviewing is local government finance. At stake is the introduction of local revenue-raising powers, which may help inject a much needed sense of local relevance into authorities’ agendas. Congestion and green taxes are possible options, and even the idea of a local income tax is being floated.
But directly raised local revenue is only half the argument. Local councillors need the freedom to spend these funds on projects that make a visible difference to the community they serve – and be able to claim the credit for it.
As a Labour candidate in the 2002 local elections, it was a struggle to convince people why they should bother to vote to change the make up of the local council. Supporters of ‘new localism’ would argue that elections to foundation hospitals, and in the future perhaps, school and police boards will help clarify what people are voting for, but surely that leaves councillors with even less of a role to defend?
There is a real opportunity here to assert the role of local democracy by making a direct link between local taxation and service provision. If we want citizens to vote for a dynamic and impressive set of Labour candidates, then rather than hiving off services to a plethora of ad hoc bodies, the government should allow local people to see the direct return on their vote
and their council tax.
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