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Can Labour councils seize the initiative on fighting cuts?

CHRIS WILLIAMSON on a little-known power local authorities could use to stop cuts without taxing the poor more

AS EACH week goes by the pungent pong of a putrefying political party is polluting Westminster’s corridors of power. That pretty much sums up the Conservative Party’s current plight, and it is reminiscent of the mid-1990s.

Back then, as sleaze allegations were engulfing the Tories, they were fighting with each other like rats in a sack about Europe, and a hapless prime minister was squatting in Downing Street awaiting the inevitable.

Sounds familiar doesn’t it? But this time the situation is far more serious for the Tory Party, which is now facing an existential crisis.

As Michael Heseltine rather ghoulishly explained just after the general election, 2 per cent of Conservative voters are dying every year and their poll ratings among younger voters are dire.

Moreover, there is no Tony Blair waiting in the wings to continue the neoliberal project under a future Labour government. In fact, Jeremy Corbyn represents the very antithesis of the cosy love-in between Thatcher and Blair.

Remember it was only 15 years ago that Margaret Thatcher said her greatest achievement was “Tony Blair and New Labour.”

And Blair is on record saying he “always thought” it was his job to “build on some of the things she had done rather than reverse them.” He also said she was “immensely kind” to him and even admitted asking her for advice.

What a pity the kindness Thatcher displayed to Blair didn’t extend to miners, steelworkers, printers, factory workers or any group of trade unionists for that matter.

Nor was it dispensed to anyone working in the public sector, hospital patients waiting years for life saving treatment, disabled people reliant on social security, unemployed workers or anyone living in poverty.

The truth is Thatcher’s reign was utterly ruinous. Its legacy is responsible for virtually all our modern-day ills, from the banking crash to the housing crisis, from low pay to record levels of personal debt, which is now more than £1.6 trillion.

Can you imagine Jeremy seeking out advice from David Cameron or Theresa May? No, it simply would not happen because he doesn’t want to imitate what the Tories have done; he wants to reverse their legacy to create a new progressive consensus.

A Corbyn-led Labour government would work to permanently change the balance of power in favour of ordinary people. This would be achieved by creating an economy that works in the interests of the many not the few, which would deliver the resources to fund quality public services and a compassionate social security system.

But this Tory government and its redundant ideology could in theory last until 2022, which poses a challenge, particularly for Labour in local government.

Labour councils have borne the brunt of the austerity agenda and have been the unwilling agents of a government hell-bent on laying waste to whole swathes of public services delivered by local authorities.

This has led to huge dissatisfaction with Labour councils in many areas and several bitter industrial disputes with various groups of workers.

But there is a way that Labour councillors can seize back the initiative. In what would be a delicious political irony, they can use powers contained in legislation that was steered through the House of Commons by the arch-Thatcherite Eric Pickles.

Section 10 of the Local Government Finance Act 2012 added a new power enabling councils to reduce a person’s liability to pay in accordance with the authority’s Council Tax Reduction Scheme. This states that liability may be reduced “to such an extent as the billing authority thinks fit.”

This power also enables councils to create categories to which reductions in council tax can apply.

Consequently, Labour-controlled authorities could decide to introduce a progressive differential council tax that would enable them to effectively freeze council tax for people living in modest accommodation. But the quid pro quo would be to levy a sufficient council tax increase on more affluent households living in larger accommodation.

This would allow councils to raise enough resources locally to not only stop further cuts, but to start investing in local services again.
Anyone on a restricted income living in higher council tax banded accommodation would be protected from penury by a council tax support scheme.

The Localism Act 2011 would require councils taking up this suggestion to put the proposition to a referendum, because the council tax increase would be well above the 5 per cent threshold. But those living in lower council tax banded properties would have the increase progressively discounted down to zero for people living in Bands A to C.

Meanwhile, those in Bands D to H would pay a progressively higher increase. This could be from 20 per cent for Band D up to 100 per cent for Band H. The local permutation could vary, but the idea would be to raise sufficient funds to protect and improve local services.

The choice facing households living in Bands A to C dwellings in the ensuing referendum would therefore be stark. They could either vote to stop the cuts and improve services, without paying any additional council tax, or vote for more cuts and to pay more council tax. Faced with such an option, the choice would seem to be a no-brainer.

This manoeuvre would allow Labour authorities to introduce a redistributional council budget. It would also limit the damage this odious Tory government could inflict in its death throes up to the next election.

Chris Williamson is MP for Derby North.


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