It’s Austerity again.

Council Tax is going up. There’s very little choice. The financial settlement from government has been appalling. Rural councils have been hardest hit with real term cuts. It’s austerity all over again. True to form this government’s double speak department has gone into overdrive. Less is more and money from council tax is money from Whitehall. No it’s not, that’s just not true. It’s from many hard-pressed local people, struggling to make ends meet.

Council tax is a regressive tax. Like indirect taxes such as VAT and duties, it’s not means tested. Doesn’t matter if you’re a millionaire or a pauper, you’ll be paying it. I’d also add energy bills and water rates. They might as well be taxes too. You can’t get by with no running water or heating. Again, not means tested and the poorest struggle the most.

Debate on tax?

Most people accept taxes have to be paid, it’s the cost of civil society. We all knew that whoever got elected as the new government, taxes would inevitably go up. Yes, there’s always room for improvement in productivity and efficiency in the public sector but it needs to have the investment. Many of our schools and hospitals are crumbling, not to mention the state of our roads! All that costs money to fix. To introduce the improvement and reform, we need to have infrastructure fit for purpose.

It’s rather depressing we’ve had a general election last summer and yet tax was a taboo subject. Pretty much all of the parties – with the honourable exception of the Greens – colluded in this deafening silence. They claimed taxes wouldn’t be increasing, but they knew that wasn’t true. Freezing personal allowances, fiscal drag, and guaranteed council tax rises meant personal taxation was going up. All the new investment was to be paid for by economic growth and efficiency savings. We’ve heard it all before.

Where’s the money coming from?

We now know, as if we didn’t before, taxing jobs doesn’t create growth. The government’s in danger of having a bout of Liz Truss. ‘We haven’t got it wrong, it’s everyone else.’ This cloth-eared approach, be it housing, the economy or local government reorganisation, is becoming a worrying trait. It’s not a sign of weakness to listen and compromise it’s a sign of strength and self-confidence. Political dogma never ends well.

In opposition, the chancellor Rachel Reeves wrote a pamphlet called ‘Everyday Economics.’ In it she argued that taxing wealth not work, was the best way to raise revenue. It was also fairer and created a more equal society. How ironic, that when in power she has done exactly the opposite. There will be pros and cons to any approach, but as a country we need to have this debate. For myself, I’m pretty sure that the ever-widening gap between the haves and the have nots is not healthy and we will all suffer in the end.

Keep it Local

In a low wage economy, as there is in the South Hams, the cost-of-living crisis has a disproportionate effect. The more money that is siphoned out, the less money there is to spend in the area. It’s why, as a council, we have a ‘keep it local’ philosophy running through our strategy. From local producers to renewable energy schemes, we will do what we can to keep local money circulating in the local economy.