Raising the Wind
By PHILIP HOCKING, MP
DuRiNG the last fifteen years, the rates paid by ratepayers have had a habit of in- creasing year by year, and now that the rateable value of property has been brought up to date they are wondering whether it will mean that they will pay less in rates or more. The revalua- tions are certainly up, but rate poundage should be considerably reduced.
Revaluation is not designed to put up rates, but to ensure that industry, shops, offices and domestic hereditaments are rated on the basis of up-to-date valuations. Whilst the present system of rating remains—that is, a rate levied on the Annual value of the property—an up-to-date valuation must be used in order that such a policy may be fair to all concerned.
At the present time, in county halls, town halls and centres of local government up and down the country, finance committees are considering what the rate should be in their locality. Esti- mates are prepared by the various committees which look after the services provided by the local authority, education, housing, health and welfare, roads and sewage disposal. The pro- vision of these increases in cost as they expand. Each year fresh proposals are put forward by various public bodies demanding an increase or an improvement in these services, often without considering where the money is to come from. The money has to be found from somewhere and, whether it comes from the ratepayer or the taxpayer, it usually means that it comes out of the citizen's pocket in one form or another.
Some people believe that the ratepayers pay all the cost of local services, but this is not true. Over half the cost of running a city is now paid by way of exchequer grant, by the taxpayer, and the trend appears to be to increase the tax- payer's portion of the burden. It is argued by some that it is unfair that this cost should be carried solely by householders, and that lots of people who are comparatively affluent contribute little to the city purse. Flow, then, should the burden be moved from the ratepayer's shoulders, and redistributed?
The largest single item in the average county borough is that of education. Over half the money raised by way of rate goes to provide the educational services. Some people suggest that education should be taken completely out- side the field of local government and organised on a regional basis (like the hospitals) with regional committees, and the whole cost provided through the Exchequer. I do not believe that this would be an altogether satis- factory way of providing education. Those who served on the regional education committee would be remote from the citizens on whose behalf they administered the service, and there would not be the same opportunity to provide variety in the educational system which exists today. In some districts the local education authority provides large comprehensive schools with multi-streams of technical, secondary mod- ern and grammar, where children arc sometimes transferred from one stream to another as their aptitude develops. In other districts schemes of associated schools have been established. In these too children are sometimes transferred from one school to another, again according to apti- tude. Elsewhere separate schools with a definite identity of secondary modern, technical or gram- mar have been established. It would be difficult to reorganise on a regional basis while still em- bracing these different schemes.
It would, however, be abundantly easy to separate certain costs of education—and one of the heaviest costs is that of teachers' salaries, which are negotiated on a national level. Many people now believe that this cost should be transferred from the rates to the national ex- chequer. This would very possibly mean a reduc- tion of up to 25 per cent. in the present rate bill.
An important part of local government ex- penditure, which has increased considerably in recent years and has the appearance of con- tinuing to increase, is that of the ancillary health services. These services, which provide for infirm, old people and handicapped persons. as well as operating many of the infant welfare schemes, could be transferred to the national exchequer, and be included in the cost of the health service. This might reduce the rate by, a further 8 per cent. Two other services which are operated by some local authorities are the police force and the fire service. Although these two services rank for considerable help by way of grant from the national exchequer, if they were completely paid for by way of the Ex- chequer. this could again reduce the rate by a further 6 or 7 per cent. Such schemes mean that by removing teachers' salaries, the various ser- vices associated with health and welfare, the police and the fire service, it would be possible to reduce the rate of the average ratepayer by approximately 40 per cent. There are, hoWever, certain disadvantages to such a scheme. It would mean that more people would become civil ser- vants under the immediate control of the 'Ex- chequer or one of the Ministries, for he who pays the piper usually calls the tune, and I am not sure that the representative bodies of these people would be keen for their professions to be taken over in this way.
Another school of opinion believes that the present system of rating is fundamentally wrong, that it should not be a property tax but that in its place should be levied a local income tax. The argurnent put forward in favour of such a system is that it would spread the burden over all those who earn big wages or salaries, and they would in fact pay according to what they earn. This system, apparently fair to all at first glance, would be exceedingly difficult to operate.. What would happen in the case of commuters? Would the money be deducted at their place of work and remitted to the town hall some forty or fifty miles away? Would the incidence of this rate be the same for each rating authority, for if it were not an employer would be faced with the unenviable task of deducting several different sums from his employees and sending them to a multitude of authorities in his district? I do not believe this to be a practical scheme.
Another, which is sometimes mentioned by those who are interested in rating reform, is a system of rating based on the capital value of the property. This would not help to distribute the burden any more evenly than at the present time when we find the householder pay- ing 25 per cent. of the cost of running our cities, the shop, office and factory owner paying a fur- ther 25- per cent. and the Government contribut- ing the balance, by way of grant through the Exchequer. I believe that the best system would be one in which the Government, through the Exchequer, shouldered the responsibility for edu- cation and those other services which are the direct result of national policy.
The local authorities could be given powers to supplement these services if they so wished, to administer them, and would also be respon- sible for that portion of the present rate bill which is. in fact, devoted to local amenities.
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