The measure of interim rating relief announced by the Government after a resolution of the House of Commons, proposed by the Opposition, has not satisfied the objection of ratepayers to the rate burden or to the rating system. Even after the relief, many ratepayers still have to pay increases of up to 50%; at a time when their incomes are rising by far less. If retired, their incomes may be diminishing in real terms.
In addition to this year's problems ratepayers justifiably fear further large increases in future years. The capacity of governments to spend has gone beyond the capacity of ratepayers to pay. The first essential therefore is to limit total public expenditure. This means looking at existing expenditure in terms of value for money and scrutinising any proposed increases. Stories of large staffs, high expenses payments to councillors and needless subsidies to those who can afford to pay for things themselves cause alarm and anger among ratepayers and taxpayers alike.
In this situation some reassurance about next years rate burden is needed. The subsidy from the taxpayer to local authorities has increased each year but it has been sufficient to prevent intolerable rent [sic] increases. [end p1]
I believe that the least we can do for next year is to transfer to the exchequer the cost of teachers salaries. A teacher quota is prescribed each year for the guidance of local education authorities and this could act as the limit of transferred expenditure. Such a step would not affect the power of local authorities to choose their staff or to decide on the proportion allocated to the primary and secondary schools and sixth-form colleages. Other expenditure such as that on the police or fire services could rank for increased grants in the same way as the last Conservative Government decided to put 90%; of the cost of student grants on to the exchequer.
It would a condition of any such transfer that local authorities would not spend more in other directions. Otherwise the citizen as both taxpayer and ratepayer would be worse off than before the changes.
In the long-term the system of local government finance must be changed so that it reflects the ability of people to pay.