From The Evening Standard (much better value now it's free):
Londoners were given a cash boost today after it emerged that every single borough has agreed to freeze council tax this year... The bill for an average band D property is expected to be about £1,300 - the same as last year. The councils are among 133 across Britain which have already confirmed they will keep the levy down.
Many more are expected to agree a freeze in coming weeks because the Government is offering them a financial incentive to do so. They will get a rise in their grant equivalent to a 2.5 per cent increase from last year...
[The Morbidly Obese One] said: "I welcome the news that London authorities are now leading the way in taking part in the Government's £650 million council tax freeze initiative. This shows that local authorities can keep taxes down and protect front-line services. Driving down the nation's deficit is the Government's biggest priority but we have made sure extra money is available to protect the public from council tax rises, offering real help to hard-working families and pensioners."
For more background, see my post of earlier today (this measure will nudge Council Tax revenues down from 4.8% to 4.5% of all government revenues) but how stupid do they think we are?
Why does it make any difference to "hard working families and pensioners" (taken as a single group) whether we pay extra National Insurance and VAT to the government so that they in turn can pay this 2.5 per cent top-up to local councils; or whether we pay a bit less in those and 2.5% more in Council Tax?
For sure, this is the Home-Owner-Ists' model of the universe, that there is a magical money tree called 'housing' and if only the government would stop shaking it they would all be wealthy beyond their wildest dreams, but that's not how it works.
And yes, I accept that such a tax shift will be welcomed by pensioners, but what's good for them is by definition bad for "hard-working families" who shoulder the extra VAT and National Insurance, and to claim it is simultaneously good for both is clearly bullshit.
Wednesday, 9 February 2011
How stupid do they think we are?
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6 comments:
I did wonder why all the bleating councils did not put their money where their collective mouths where and simply raise council tax. Now I can see that Clever Old Pickles has bribed them not to. Very good.
BE, and TMO1 also said that people would be able to veto council tax increases, so it was pretty unlikely that councils would dare try it. The bribe is just to really nail it down.
Still, nice to see the Grand Alliance holding good to that "there will be less spin and more honesty and transparency from us - we won't assume you are all gullible idiots, or indeed journalists of the copy from the press release and paste tendency" isn't it .....
The difference is that it will make local councils even more totally dependent upon central government funding and thus even less able to resist further "nudging".
To be fair, don't forget that any council that DOESN'T agree to freeze council tax won't get the money. In effect, their residents would be subsidising the rest. So it's also a nudge in the direction of cutting council spending, which frankly I welcome.
AC, nope.
If a council wants to increase council tax...
1. TMO1 will allow their residents to veto it.
2. He will cut their funding by 2.5%.
3. He will cut their funding a bit more because the formula grant rules are so complicated (i.e. arbitrary) that the party in government pays as much as it wants to its own councils (Labour took this to extremes, of course) and as little as possible to the others.
4. You overlook that most wasted spending is with Central Government (i.e. they waste 50% of the 90% which is under their control) and councils only waste let's say a third of 10% that they control.
5. You also overlook that the VAT and NIC hikes are supposed to increase the tax burden by £20 billion and the council tax 'freeze' doesn't reduce it by one penny.
So the Lib-Cons serve up a shit deal for 'hard working families', and a splendid deal for wealthy pensioners and their mates in the 'private sector'.
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