Sunday, October 02, 2011

Of cabbages and kings...

As is so often the case, an EUReferendum post sums up a great deal of the problem in this country (indeed, with the whole social democratic system).
It goes without saying, though, that it is not safe to give local councils more power until we have more power over those councils. And that means money. We must control the purse strings … the essence of the Referism concept. As long as we have "masters" who can decide year-year-on-year how much we will pay them, and our choice is only how we pay them, there can be no democracy.

As long-time readers will know, your humble Devil is not a fan of democracy as an endgame: liberty is the point—democracy is simply the best way that we have so far found to maintain freedom for the longest possible time. However, a proper democratic process—where the people actually have the power—is a half-decent goal.

And, as Richard has pointed out repeatedly, the only way that we can gain power is, in fact, to control the cash. Because as long as our lords and masters control the money, they control us: not simply because they demand said monies, but because it gives them limitless recourse to the law.

(As I am coming to believe, one of the biggest stumbling block to any kind of proper libertarian society is the lack of access to the law. But that is a post for later.)

When I endorsed EUReferendum's Referism concept, a great many commenters envinced a belief that people would simply got themselves more and more money—that, in effect, no savings would be made and we would end up in a situation just as bad (or worse) then the current one.

It is perhaps instructive, then, to find the time to link to a post that EUReferendum published a few days afterwards—pointing out that such referenda on taxation have been tried before.
From the school of nothing new under the sun, a reader points out that, in February 2001, Labour-controlled Bristol City Council held a referendum on its Council Tax, asking voters whether they preferred to increase it by two, four or six percent, or to freeze it at then current levels.

Much to the chagrin of the Council, which had expected otherwise, more than half of the voters opted for a freeze. Sentiment was such that, had a reduction been on offer, the indications are that this would have been the preferred choice.

And it was also tried by Croydon...
Nor was Bristol on its own. The Council was just beaten to the punch by the London Borough of Croydon, which on 14 February 2001 asked its 235,000 registered electors to decide whether Council Tax should be increased by two percent (in real terms, an effective freeze), 3.5 percent, or five percent. Council tenants also voted on whether their rents should be increased.

Again to the chagrin of the Council, 56 percent of the voters opted for the lowest possible rise in Council Tax. A total of 80,383 voted, a 34.2 percent turnout. Thirty-two percent voted for the 3.5 percent increase and a mere five percent went for the five percent hike.
...

Croydon was to repeat the experiment the following year, with 74 percent of the taxpayers who voted opting for the lowest rise on offer, at 3.65 percent, on a 35 percent turnout.

Although it was Milton Keynes that had started this trend...
Interestingly, this experiment in direct democracy had started in 1999, when Milton Keynes had put to its voters the choice of three levels of increase, ranging from five percent, 9.8 percent and 15 percent.

Residents were able to vote by post or by phone for their chosen option. A 9.8 percent rise would keep core spending at the same level, while the five percent increase would have meant cuts in the core budget and a 15 percent increase would have provided extra revenue). Forty-six percent of those who voted opted for the 9.8 percent rise, thirty percent for the five percent increase and twenty-four percent for the 15 percent hike. The turnout was 45 percent.

Council leader Kevin Wilson told the BBC he was "delighted" by the result. "The referendum gave the people an opportunity to be masters rather than servants," he added, declaring that the referendum had succeeded in its aim of reconnecting people with local government and gave public backing for council tax rises.

Buoyed by the result the following year, Bristol announced that the public would get a chance to vote on their council tax levels, "under plans drawn up to tackle voter apathy". The scheme had the backing of government ministers and, if the public had responded "positively", the plan was to repeat referendums across the country. Clearly, the response was not "positive" enough.

Clearly.

Although, clearly (for your humble Devil, at least), when people are given the choice, they vote to pay less money. And they do so at turn-out levels that are more respectable than the vast majority of elections in this country.

Despite (or, possibly, because of) the carping of the left-wing media.
At the time, The Independent was to lament that, "in a victory for the maxim that people vote with their wallets, the results showed few people in favour of extra spending". "Voters of Bristol pick school cuts over taxes", it headlined. The Bristol experiment was not repeated by Labour.

But did the Coalition not promise something similar...?
As of July last year Communities Secretary Eric Pickles has declared that by 2012, he wants people to be able to reject Council Tax levels "if they exceed a ceiling agreed annually by MPs", by voting on them in referendums.

This is based on a promise made in 2007. Pickles calls the plan a "radical extension of direct democracy". It is not. Instead, it is a considerably watered-down version of the earlier referendums – which themselves did not allow for an outright veto. And, needless to say, there is absolutely no suggestion that referendums should apply to central government spending.

The simple fact is that when people are given the chance to vote solely on the levels of taxation—rather than a whole collection of other policies and tribal dog-whistles—they vote to pay less.

As such, putting the Finance Bill to the electorate every year—not just Parliament—would be likely to drive taxes down considerably. Coupled with a legally binding restrictions on borrowing levels, this policy would force the government to form its spending plans depending on how much taxpayers let it raise.

Such fiscal restraint would force governments to spend less money more wisely. And lower taxes would lead to higher growth.

What's not to like...?

6 comments:

Ryan said...

They may vote for less tax when asked directly but they will almost certainly also vote for increases in services. This is the primary reason that California is a fiscal basket case.

The King of Wrong said...

People will vote to pay less tax, yes, absolutely.

Trouble is, if you also give them a vote on whether to keep benefits the same, or to increase them by 5% or by 10%, they will vote to increase benefits, too.

That's how democracies always end: a majority voting to pay less and receive more until the system collapses...

WitteringsfromWitney said...

Trouble is DK, under the Localism Bill (section 59 from memory) the local authority have the right to disregard any result if they so choose.

So much for devolution of power!

Suboptimal Planet said...

"Coupled with a legally binding restrictions on borrowing levels"

This bit is crucial. I'd suggest that the level should be zero. Certainly whatever debts exist at the end of a a term of government should be wiped clean.

john in cheshire said...

I would like to be able to vote on the actual services that are provided by local government; for example, social services - which I would always vote against; together with the cost per household of providing said service. Then people, perhaps, could relate the service they want, with the cost of having it provided.

tomsmith said...

Why is paying according to what the majority of people in your local area want to spend your money on any better than the current cockup of a system? Once "referism" became accepted it would be perverted in exactly the same way as current types of democracy. The problem is democracy, and politics itself.