What to Expect in 2010
7:20 pm - September 29th 2008
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Boris Johnson made his first conference speech as Mayor of London yesterday. In it, he made the proud boast that:
“…for the first time since the GLA was created, for the first time since London has had a mayor. I will not be coming back to the people and asking them for more money in tax. There will be no increase in our share of the council tax next year…”
He justifies these cuts with the claim that we must cut tax, because the credit crunch pinches hard on wallets. That’s an odd defence. To fund the hole in the GLA’s budget the cut makes, Boris will no doubt need to cut public services and increase fees for those that remain; putting pressure on incomes, just in another place.
It’s an especially odd defence when you consider that, in fact, Boris raised London’s public transport fares by some 11% recently. Hardly a move likely to aid those commuters suffering from the economic downturn that Boris claims his policies will make easier. Many who regularly use public transport use it because they must; either a car costs too much, or is simply impractical.
So, the claim that these cuts come because it’d be criminal to foist yet more money from Londoners during a financial crisis wears very thin; as, actually, he will take more money from other Londonders, elsewhere. As Mr. Stop Boris points out:
By taking disproportionate sums of money from public transport users in order to keep Council Tax down, rejecting the option of spreading the pain relatively fairly among all Londoners in favour of penalising those using public transport, Boris is benefiting those in suburbia with big houses and cars, who could best afford to pay more, at the expense of those living in poverty and reliant on the buses to get around.
The money for the council tax cuts won’t come from fare-rises, which come from another pot with other holes in it. But they will come from cuts to other public services used just as much as the buses by those who can’t afford anymore.
Boris tells us this is the most fundamental illustration of what a Tory does in power. Perhaps we should take note of what that is then; a series of policies whereby the wealthy pay less and the poor pay more. Osborne proposed similar cuts in council tax at the Conservative Conference today. If Johnson’s example is anything to go by, they’ll come from public services whose users just can’t afford that. Which first, I wonder?
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Douglas Johnson is an angry London student, socialist and member of the Green Party. The bulk of his anguished ravings can be found at Scribo Ergo Sum, which he edits.
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Reader comments
Except council tax freezes are not freezes at all, nor are they cuts, they are central subsidies based at retaining the actual taxpayer cost at one rate while asking councils to not rise their taxes by more than 2.5% for two years. Do services need to be increased by more than 2.5% a year? In some areas perhaps they do, and that’s where this policy becomes a weakness. In others I’m sure you can get away with small rises without effectively cutting anything. It’s not a simple “tax cut paid for by service cuts” situation, and given how we lambaste Labour on here for reducing themselves to the “same old Tories” argument, we probably shouldn’t indulge in it ourselves without real basis.
So the bill is simply passed onto local councils. Which, of course, means that those councils which can afford it will make the cuts, while those who can’t won’t. Given that those councils which can’t will be those with a lower income from the tax in the first place – that is, those in poorer areas – the poor still won’t see the benefits. I saw Vince Cable put it rather better than that, but I’d need to find the quote to quote him, and am’t quite up to that at present…
What bill? If the council taxes cannot be limited by central government then they can do what they like. There is the strong argument that by saying that central government will pay for up to 2.5% increase each year that they are essentially capping spend increases through council desire to save money…but ultimately the councils are free to do what they like. Their operations won’t be changed whether the Tories pay for the increase of the general public do, the people certainly not hamstrung (aside from politically perhaps, if the council isn’t very strong) are the councils!
Given that this country needs to go through a period of stabilisation the 2.5% figure also doesn’t seem too harsh to me either.
I think the tactics are wrong, I don’t agree with the centralisation situation it is all stoking, and I question how useful it will end up being when you do factor those councils that need to make big increases, but to say that this is a) anything to do with cuts and b) that it is a measure that will disadvantage the poor is nonsense.
If these measures put a stop to extra spend at a time when thrift is needed, then the public in that area benefit. If the council simply has to increase services over the 2.5% then people will be in no worse position than they were before Tories made this announcement
Lee,
But are you including the problem of increased inflation, and the faster-than-predicted rise in the costs of providing exactly the same services as before?
And what happens if bloody Unison (and others) – sorry, but I’m a single parent who’s seen a BIG %age drop in my real income over the last 6 months, without any sign of more cash coming in, so I perhaps lack sympathy 🙂 – achieve their goal of higher than 2.5% wage increases?
Now we’re not talking about “extra spend”…
That’s the only part of the situation that makes this interesting, and tbh I think that Unison are acting irresponsibly on pay, but only because Labour haven’t managed to keep up their end of the “fairness” deal over the past decade.
But I’ll say it again, there is no incentive or disincentive, other than political capital, for a council to change it’s budget plans. They can if they want, and people will save some money for it, if they don’t then nothing’s changed. If council’s decide to spend less money on services because they want to save people money but do so at the expense of services that is *not* a Tory central government problem, that’s a local level prioritisation issue.
The fact is that the Tories here are offering a way to help people with their bills for the next couple of years, if councils manage to play ball. The biggest argument against this policy is the same sort of argument that goes against the Labour equality policy…and that is that ultimately it is a policy to no change. Argue as much as you want about the Tories putting something on the table here that really doesn’t guarantee any tax freezes whatsoever along with a likelihood of few councils taking the opportunity given the state of the public sector, you have a point…but to argue that this is a tax cutting measure by cutting services? If your council wants to do that it’ll do it under Labour, Lib Dem or Green government, it’s nothing to do with who’s in power nationally.
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