Letters
A monetarist's dream
Sir: Charles Moore ('Mr Jenkin's cap', 14 January) displays only a partial grasp of the issues at stake in the Government's rate- capping proposals. He accepts the incongruity of loading responsibilities onto local authorities while denying them the income to carry them out. Nevertheless he supports the Bill on the grounds that it is no constitutional novelty and 'more likely to work' than similar previous measures. On the first ground he is simply wrong. Local authorities' discretion to levy rates did not begin with elected county councils in 1888 but with the Elizabethan Poor Relief Act of 1601, indeed in some respects even before that. In a unitary state local government must of course be subject to the sovereignty of the Queen-in-Parliament. Within this constitutional framework there is, however, a long British tradition of local government autonomy.
On the second ground Charles Moore is perverse. Rate-capping may well curtail local government expenditure but it is doubtful that this will assist the fight against inflation. As one who broadly supports the Government's economic policy I am at a loss to understand its obsession with rates. Expenditure financed from rates (as opposed to borrowing) is not inflationary. Rates are a monetarist's dream tax.
In any case profligate spending by local authorities could be tackled by measures more consonant with the Government's political philosophy and less fraught with constitutional pitfalls. The problem with government is the weakness of local
(local
accountability. This could be remedied by abolishing non-domestic rates and most grants and substituting an income drawn from the electors (like local income tax). Together with other measures to heighten local control this approach could just as effectively check the irresponsible municipal spenders.
Professor D. E. Regan
Department of Politics, The University of Nottingham
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