• Choose a category
• All
• Classic-Fiction

By Root 3041 0

holders: now it is almost identical to that for parliamentary elections. The old business vote has gone too. The only serious argument for the rates — business and domestic — was that they were relatively easy to collect: people can abscond, houses and factories cannot. The rates became a painless tax for the large number of local electors who were not liable to pay them. But this was what made the old system so defective, ultimately even dangerous. Of the 35 million local electors in England, 17 million were not themselves liable for rates, and of the 18 million liable, 3 million paid less than full rates and 3 million paid nothing at all. Though some of those not liable contributed to the rates paid by others (for example, spouses and working children living at home), many people had no direct reason to be concerned about their council’s overspending, because somebody else picked up all or most of the bill. Worse still, people lacked the information they needed to hold their local authority to account: the whole system of local government finance worked to obscure the performance of individual authorities. It is not surprising that many councillors felt free to pursue policies which no properly operating democratic discipline would have permitted.

This lack of accountability lay behind the continued overspending. Although central government steadily reduced the share of local government spending met from the Exchequer, the result was more likely to be higher rates than lower total public spending. That was unsatisfactory for the overall economy. But it was ruinous for local businesses and — ultimately — for local communities. In the summer of 1985 when we began seriously to look at the alternatives to the rating system, some 60 per cent of the rate income of local authorities in England was coming from business rates. In some areas, though, it was a far higher percentage. For example, in the Labour-controlled London borough of Camden it reached 75 per cent. Socialist councils were thus able to squeeze local businesses dry and the latter had no recourse except to press central government to cap the council concerned or to move out of the area. It might be imagined that the devastating effect of such policies of overspending on employment would discourage Labour authorities from such action. But I never forgot that the unspoken objective of socialism — municipal or national — was to increase dependency. Poverty was not just the breeding ground of socialism: it was the deliberately engineered effect of it.

Popular discontent with the rates surfaced strongly in the motions submitted by constituencies for our 1984 Party Conference. Conservatives in local government were unhappy at the apparatus of central controls — particularly on capital spending — and within the Department of the Environment there was concern that these controls gave rise to so many anomalies and political difficulties that they could not be sustained for many more years. Nor was it yet clear how effective rate-capping would prove. Accordingly, in September 1984 Patrick Jenkin sought my agreement to announce to the Party Conference a major review of local government finance. The Party Chairman, John Gummer, gave him strong support. But I was cautious. There was a danger of raising expectations that we could not meet. After all, there had been two previous reviews — under Michael Heseltine and Tom King — and only the most modest of mice had emerged. Unlike October 1974, we must be absolutely clear that we had a workable alternative to put in place of the present system. I authorized Patrick to say no more than that we would undertake studies of the most serious inequities and deficiencies of the present system. There would be no publicly announced ‘review’ and no hint that we might go as far as abolishing the rates.

Later that October I held a small meeting at Chequers to listen to a presentation of the intricacies of the Rate Support Grant system. When it ended I was more convinced than ever of the fundamental absurdities of the present system. Afterwards