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Local Government Finance

Conservative & Labour Liberal Democrats
The Conservatives have conducted failed experiments with local government taxation, including:
  • The Poll Tax, which was grossly unfair, inefficient and wasteful.
  • The Council Tax, which is inequitable, inefficient and geared to benefit the rich.
  • The Uniform Business Rate (UBR), which harms business and takes power away from local government.

The Conservative Research Dept even admitted that "A system of local government finance based on rateable values is deeply flawed".

Despite its manifesto pledge to end capping during the '97 election Labour has announced that capping will remain. With capping in place there will be cuts in education, social service, local community care, meals of wheels etc.

 

 Liberal Democrats would make local government more accountable to local people. We would:
  • Replace Council Tax with the introduce of a Local Income Tax as the fairest and simplest way to pay for local services.
  • Replace the Uniform Business Rate with a fair system of locally set taxes called Site Value Rating (SVR).

Local Income Tax and Site Value Rating.

The Inland Revenue would collect Local Income Tax just as it collects national Income Tax, with any necessary adjustments being carried out once a year.

Site Value Rating will be a tax for local businesses (with exemption for agricultural land and individuals' principle residences), levied on the value of the site.

Both these taxes are easy to understand, easy to administrate and are fair. They would make local councils truly accountable. They have been tried, and work effectively in many other countries. Most importantly, Local Income Tax is directly related to the individual's ability to pay.

 

Facts & Figures.

In 1993 Labour controlled councils owed more than some 3rd world countries:

  • Manchester £1.4+ billion.
  • Birmingham £1.2+ billion.
  • Islington £900+ million.
  • Lambeth and Southwark, both £850+ million.
  • Liverpool, Hackney, Camden, Leeds and Sheffield, all over £700+ million.
  • This amounts to a total of over 8.5 billion pounds.

This is compared to poor African nations such as, Burundi and Rwanda, at £550+ million each.

Questions & Answers.

Q.
We don't need Local Income Tax now tax we have the Council Tax?.
A.
Yes we do. The Council Tax compounds the problems of the Poll Tax with the discredited old system of rates. Local Income Tax saves on bureaucracy because the means of collections is already in place, and it is fairer because it is based on the ability to pay.

Related topics:

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