Thursday, 15 March 2012

Nick Clegg and the many mysteries of the mansion tax

In Nick Clegg’s house, there are many mansion taxes. He’s given them more re-launches than Frank Sinatra had final tours. Yet, despite the considerable national media coverage over the last 30 months, only in the last week have they begun to ask serious questions about what, why and the practicalities.
In June 2009, he ditched the Lib Dem policy commitment to a local income tax to replace council tax.
It was a sort of trial run for his later decision to resile on the tuition fees’ promise. He took the decision without even consulting his own local government spokeswoman Julia Goldsworthy, who just hours earlier, in response to my questions, had told the House of Commons that the Liberal Democrats were totally committed to the implementation of a local income tax. Having ditched LIT, Nick Clegg had a problem. He needed to find some alternative to satisfy his activists.
Again, without consulting his local government team – although he did have the courtesy to apologise this time – he announced a mansion tax which would apply to properties valued over £1m as an additional source of local government finance to supplement council tax.
I wrote to him to ask some simple questions like “How many £1m-plus mansions are there?”, “What tax rate is proposed?” and “What is the estimated tax take for each local authority?”
Of course, I didn’t get any response. The reason was simple. He hadn’t the faintest idea, but it made a good headline.
Then, in December 2009, he suddenly announced that the mansion tax would now only apply to properties valued at more than £2m. I wrote to him with the same questions and again there was silence.Nick Clegg went into the general election campaign with a policy vacuum on local government finance, simply finessing it with the occasional reference to mansion tax. David Cameron and the Conservatives went in with promises to halt the rise in council taxes and a commitment that there would be no revaluation of domestic properties for council tax purposes. Subsequently, the 28 per cent cut being made in aggregate financial support for local government means that there will be no central government grant to councils.
Then, suddenly, in the last few weeks, Nick Clegg and Vince Cable have again started making speeches about a mansion tax. However, this time, it has absolutely nothing to do with local government finance and everything to do with being a pawn in a coalition Government negotiation about the 50p income tax rate, stamp duty avoidance, bankers’ bonuses, inheritance tax, non-dom levies, and the level of and balance between taxes on income and wealth.
Let us be clear, the only reason why this coalition Government might consider a mansion tax for national income purposes is if it was prepared to admit that it has no realistic prospect of plugging the loopholes on stamp duty and capital gains tax that wealthy individuals (especially those overseas or non-domiciled) have been able to plug for so long. The great thing about property is that it doesn’t move easily and, of all UK taxes, council tax easily has the highest collection rate. I start from a different position. Irrespective of any consideration of a mansion tax, the Chancellor should act decisively in next week’s Budget to halt stamp-duty avoidance schemes and plug the gaps in capital gains tax. He must reject the heavy lobbying of wealthy individuals, companies and right-wing pressure groups whose rallying-call is “taxes are for little people”.
But, let us return to local government finance. If the Government is serious about a localism agenda, it also has to find ways of increasing finance localism. I believe that the last Labour government was quite wrong in cancelling the five year revaluations that were determined to be an essential component of the council tax framework.
That was the same sort of conscious neglect which brought the rates into disrepute. Further, I believe that there is a strong case for extending the number of council-tax bands. If the Government wants a mansion tax – a sort of council sur-tax, a tax collected locally to go into the national coffers – there will have to be a comprehensive revaluation. Just trying to revalue those properties in Band H – those valued at in excess of £320,000 some 20 years ago – is not a runner.
This, of course, still begs the fundamental question as to whether the Government is serious about enabling local councils to raise and keep significantly more of their income locally.

Wednesday, 14 March 2012

Adopting the wrong measures

This week, the coalition government has announced that councils are to be issued with score cards to measure how quickly they place children for adoption. Councils that fail to speed up adoption processes will be punished. The scorecards will track how long it takes local authorities to find kids a care home.

The overall aim – to try to ensure that children, often damaged by their life experience to date, find a new home in a caring and committed family – is surely unobjectionable. But, the government’s use of a single primary target – time taken – provides a very real danger of substituting speed for quality and appropriateness.

Isn’t this the same government which railed against, and then removed, the maximum 18 week targets for hospital in-patient treatment on the grounds that the target distorted good health services? Of course, since those targets were removed, the number of people waiting longer has shot up, nationally and locally.

Although, generally, a shorter time for treatment or adoption is a good thing, that does not always apply to the specific case. I well remember a GP telling me to be wary of the surgeon with the shortest waiting-list; he was likely to be the one who GPs suspected – evidence-based or otherwise – of producing the least satisfactory outcomes for patients and, therefore, was receiving the least referrals.

Children in care and adopters are not commodities to be processed as quickly as possible. The focus has to be on the quality of adoption rather than speed. Of course, time is one element, but quality of long-term success is far more important. Just think about the pressure that councils will now be under to place individual children rather than placing siblings together. I can already see the next set of headlines “Government target forces family break-up. Council told to ensure adoption of siblings in different families, rather than take an extra month to keep them all together.”

There are already five times more children waiting for adoption than there are adopters. The law currently requires 140 pages of assessments and many delays arise, not because of a council’s performance but because of lengthy court delays. There must be a determined attempt to identify and remove any systemic barriers. And, of course, sometimes adoption is not the right answer.

Adoption must be driven by what’s right for the child, not what’s the whim of a government minister.

Monday, 12 March 2012

Questions, questions….

Many people will be familiar with the weekly theatre of Prime Minister’s Questions – the weekly theatre, where the Leader of the opposition party and a small number of MPs, chosen by ballot get to put questions to the Prime Minister. It regularly features in the national broadcast and print media. I know that some people – including many overseas - watch it on the Parliamentary TV channel.

Far less attention is given to other Parliamentary questions and, more importantly, answers– both written and oral – which MPs ask to get information about policies and performance. Sometimes, this is like a game of cat and mouse, as Ministers try to find ways of avoiding giving answers which they know are embarrassing or unhelpful.

Here are some examples of questions I’ve asked and answers I’ve received recently, which shine some light on the real impact of government policies and show where the rhetoric doesn’t match the reality.

Eric Pickles – the Secretary of State for Communities and Local Government – has been telling us for nearly two years about the massive public clamour to keep or return to weekly refuse collection services. So, I asked him how many people had written to him about the issue from South Yorkshire. Well, just two from Sheffield – and one of those was Nick Clegg; I wonder who the other one was; perhaps it’s a case for Sherlock Holmes! – and no-one from Barnsley, Doncaster or Rotherham.

I also asked the Chancellor of the Exchequer how many households in Sheffield and South Yorkshire will lose their entitlement to working families’ tax credit from 6 April 2012 due to the government’s change in the minimum working hours’ criterion – from 16 to 24 hours per week. The answer is 2200 families in Sheffield and 5000 in South Yorkshire. And they are going to lose more than £75 p wk – a massive cut in the income of some of the lowest income working families.

I also asked the Secretary of State for Transport what plans she has to bring forward new legislation to deal with rogue companies who are offering to – or sell the equipment to - clock the recorded mileage of motor vehicles. Thousands of buyers of second-hand cars are being ripped off each year by unscrupulous sellers and dealers who cut the recorded mileage. She told me that she’s going to do nothing more, although MOT test certificates will in future show the recorded mileage at the last three tests. Not good enough!