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item0058C 884, 885 884 15 November 2003 Local government unexpected conclusion
My conclusion is unexpected - even to me! The Government's search is currently on for new local taxes, ostensibly to make local government truly local. The process is a bloody one, having destroyed Margaret Thatcher's Government and now weakening Blair's. But it will not work. The whole search is misconceived. The problem is not a practical one of taxation. It reflects a failure of political principle, a failure to understand the underlying structure of political commitments. I have come to the conclusion that we should be moving the system in precisely the opposite direction. Central government should take full responsibility for funding all "national" service commitments, while allowing greater local discretion in how those funds should be deployed. Our citizens’ sense of generic entitlement now extends to huge swathes of the public domain – education, health, community care and social services, highways, law enforcement, as well as to all welfare-state benefits. These should all be funded by central government, from UK-wide taxation. But within that framework, local discretions should be enhanced.That is what Monovascellar Theory (origin) suggests. Monovascellar fiscal theory is, admittedly, rudimentary - and old. It seems to have originated in the early 19th century, when economists were first getting to grips with the budget requirements of European governments in fighting the Napoleonic Wars. But its essence is simple. It is is that, within a single “state”, the universal entitlements of citizenship, and generic obligations of state, should be met by the State itself, from its own Fiskus. That is seen as a key distinguishing mark of statehood. What the State promises, the State should provide. Such expenditure should come from a “single pot” - hence "monovascellar". In the UK context, local authorities should under no circumstances be landed with the obligation to pay for national promises by plundering local tax resources: if exceptional local costs are incurred (e.g. asylum-related expenditure, exceptional policing costs, other civil emergencies, exceptional natural disasters) the UK state should reimburse the local community.
It is not easy to apply 19th century monovascellar fiscal theory to the modern state. But within a monovascellar framework, there could be a range of different constitutional arrangements for the actual deployment of the national revenue pot. For Wales, for example, the UK Government has passed down suitable annual funding in the form of a “Block Grant”, with few constraints upon its deployment. There is very little “ring-fencing”, used by central Government to override local discretions. That is a good way of reconciling the “provider” function with the “deployer” function, and much more use should be made of this method. Other public agencies (schools, universities, health services) can be approached in the same way. The monovascellar principle is that all nationally-induced expenditure should be met from nationally-generated tax income - that is, the State must should make adequate provision, in quantum, for those commitments to be discharged.But, having assured to the LA or provincial assembly “sufficient” income from which to cover UK-wide citizenship entitlements, it should be for the local agency to decide how those requirements should best be met – as with the National Assembly of Wales. In the 19th century there was no sense that public services had to uniform across the whole realm, either in form or content - that is a much more recent concept. But there remain a hundred thousand different local variations which could be taken into account in the local deployment of a single block grant.Monovascellar theory does not spell the end of local sovereignty – indeed, quite the contrary. It is working well, within limits, for the Welsh Assembly. For the theory allows subordinate agencies of state two key freedoms – (a) to use its discretion to deploy the Block Grant related to its population – that is an important democratic freedom whatever the origin of the tax income; (b) to levy local taxes (in the UK case, Council Tax) for local projects which form no part of any "national citizenship service", subjecting them to local referenda or polls if appropriate. For just as national promises must be met from national resources, monovascellar theory contends that local projects can only be funded from local taxation. This approach is not, it is admitted, redistributive in character, because poor localities would have more limited funding options that wealthy communities. Such territorial inequity would have to be tackled by other means. But monovascellar reasoning would permit a much more rational differentiation of function between the Westminster State and all its subordinate manifestations.
How would a monovascellar system work in practice? It would require the compilation of a "Super Barnett" system for the calculation of per capita grants - relating to education, health, social services, community care - every aspect of the modern State. The Treasury would collect all the tax income needed, and would take full political responsibility for the adequacy of the "national pot".The Government would then distribute it to chosen subordinate agencies (which Government would define) in block grant form - giving to every agency wide discretions in the manner of provision. Local communities would not be expected to contribute at all, to the delivery of those national services: Councils would never "increase the Council Tax", merely to meet a shortfall in Westminster funding - what Westminster wished, Westminster would have to pay for, in terms of the overall size of the pot provided. Particular budgets might "fall short", as a result of discretionary local deployment, but responsibility for that would clearly lie with the local agency, as at present. as if it were a national tax... I do not pretend that a monovascellar solution would be easy to devise - indeed, it would require a massive UK-wide statistical operation more sophisticated than anything hitherto attempted. But it would suit Gordon Brown well, and any Labour successor. And it would resolve, for ever, the recurring problem of reconciling two different systems of state taxation, two competing mandates, two competing jurisdictions - a problem which, if not resolved, will continue to distort political priorities, and bedevil political reputations.
10 December 2003 Spotting Scams
I was suspicious. This was an ordinary company-limited-by-shares, No. 3573127. On checking with Companies House I discovered that the company had never submitted trading accounts, and had changed its name in June 2003, from "Icare Limited". My suspicions grew, and I checked with the Data Protection Commissioner. It was a scam. The right fee, if you need to register at all, is only £35, and only official demands are valid. Ignore all others. It seems that this form of scam is quite common.
Have you ever knowngly succombed to such a scam? Tell us! Drop me a line
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Small business scams are nasty.
Small dishonest businesses preying on small
honest businesses. I
spotted a new scam this week, but thankfully did not part with my money.
The "Data Processing Protection Corporation
Limited" of Guisborough wrote to me demanding a
Registration Fee of £95, under the Data Protection Act, for one of my new charitable trusts (formed to
revolutionise public-toilet provision...).