16 MARCH 1991, Page 21


A pre-Budget flap, as curing the poll tax takes the shine off the speech


From Whitehall and Westminster come the unmistakable signs of a pre-Budget flap. Ministers and advisers who by now should be giving Tuesday's speech its last coat of polish meet early and late and again. What can be the matter? Interest- rate cuts are what count for the Chancel- lor's strategy, and now that the mark is off the boil he can make them without fear of the European exchange rate mechanism, or of six more monetarists writing to the Times. All he needs is a nice responsible- sounding Budget, to the British taste, which, as I say, is dry on the label but sweet in the bottle. More savings incen- tives, building on the PEP and Tessa schemes, inflation falling fast — good heavens, the speech writes itself. This, though, looks like the Budget where the trouble is not national taxation but local. How can the poll tax be cured, if not at the Exchequer's expense? My modest proposal is (you maj'r recall) to deprive local author- ities of the power to tax, and make them live by selling their services in an open market. The point is that services and taxes, the town hall's revenues and its functions, must be reviewed together. Twenty years ago, Conservative ministers reformed local government, all except its finances, which it took for granted. The Conservative poll-taxers made the same mistake the other way round, and now it is the anti-poll-taxers who threaten to make it again.