One of the government’s main tax-cutting drives has been to encourage councils to keep tax rises to a minimum. Ministers have done this in two ways: firstly, by giving councils a cash incentive to freeze council tax; and secondly, by forcing any council that wants to raise tax by 2 per cent or more to put it to a local referendum.
Since that policy began, Eric Pickles, the local government secretary, has been irritated (but perhaps not surprised) to see dozens of councils raising tax by 1.99 per cent – just below the threshold. So recently, as revealed last week in the FT, he began pushing for a lower limit of 1.5 per cent. Read more
Eric Pickles, communities secretary, says today that his plan for council tax will be a “radical extension of direct democracy” which will “let the people decide“.
Under his proposals, the public will have the power to veto excessive council tax rises. (At present only ministers can ‘cap’ these increases).
Any council setting its increase above a set ceiling (approved in, er, Parliament) will trigger an automatic referendum of all registered electors in its area – at the cost of tens of thousands of pounds. The cost alone (at a time of tight budgets) will prevent most local authorities from even trying to carry out big increase.
They will also shy away from such exercises because they know that - in most cases - the public will almost certainly veto the rise, judging by past experience*.
That means the vital decision is the exact level of the ceiling, which will be set by MPs in London. In which case; does this translate into a transfer of power to local people? In effect, probably not.
The most truly democratic/localist way of doing this would be to let councils do what they want. If voters are angered by council tax rises they can vote out their councillors.
* In 2002 Blair allowed a clutch of councils to hold referendums on council tax rises, including Croydon, Bristol and Milton Keynes. Most voters unsurprisingly went for the lowest rise (or freeze). Read more